Few things can derail a day like a debit card that has been disabled by the bank.
Accounts get frozen for two main reasons, bankers say. The first is fraud, unauthorized use by criminals. The second is the suspicion of fraud when none has occurred.
The first is a cause for celebration and relief, while the second can be a frustrating headache, especially when far from home, such as during summer vacations.
“Banks have gotten much more sophisticated about tracking events that can trigger fraud alerts,” said Casey Bond, managing editor of GoBankingRates.com, which conducts surveys on consumer financial topics. “It is both reassuring and the source of frustration when an account gets frozen for no reason.”
Debit cards are now the dominant form of payment for retail goods and services, according to the Federal Reserve. And that has prompted additional surveillance by banks determined to catch PIN thieves, magnetic-strip purloiners and card-number pirates.
All are new on the scene in recent years, employing hidden cameras to steal your personal identification number, devices attached to ATMs to thug your strip info, and corrupt clerks to waylay your whole card number.
To combat this, banks employ computer programs capable of analyzing reams of transaction data and organizing it based on mathematically derived formulas. That works great when a thief triggers a freeze alert by doing something you have never done, like spending $300 at a flea market in coastal Maine late on a weekday.
“If you live in Omaha and we suddenly start seeing transactions being made far away, we may view those as suspicious and decline the transactions,” said Angela Kaipust, Nebraska spokeswoman for Wells Fargo Bank. “In the event that we restrict purchases on a card, we would contact the cardholder and, if the purchase is legitimate, immediately remove the restrictions.”
It doesn't work so well when you are on vacation and wind up spending $300 at a flea market in coastal Maine late on a weekday, especially when there are dinner reservations later that night and a hotel bill is due in the morning.
To avoid such frustration, banks suggest one thing: tell them.
“The best thing customers can do before they travel, especially abroad, is to let us know when and where they will be going,” Kaipust said.
Banks suggest calling the customer service number on the back of debit cards. The people there can make a computerized note on your account. That way, if a fraud alert is triggered, the person investigating will see the note and know that seemingly odd transactions are perfectly normal.
Still, there are other things that can trigger a fraud alert and freeze a debit card, according to GoBankingRates.com research:
>> Location. “An attempted transaction from a location other than where the cardholder lives is a giant red flag to the bank, since card thieves will likely head out of town before using stolen information to make a purchase.”
>> Large outlays for easily fenced goods. “Certain items are typically associated with card fraud, such as consumer electronics and jewelry.”
>> Small outlays such as for gas in certain areas, typical of card thieves testing the waters with a few minor transactions. “What really raises a red flag concerning these small purchases is when they take place in a rough neighborhood, where there are higher crime rates.”
Once triggered, account freezes can usually be cleared up by calling the customer service number on the card and establishing that you are the cardholder, said Bond, the GoBankingRates.com editor.
Gary Grote, Omaha Group president for Great Western Bank, said basic security precautions are always a good idea, vacation or not. That includes shielding the keypad when entering the PIN and checking your account activity often to control for unauthorized use.
Grote also said many banks, his included, employ third-party services to aid customers after hours or on weekends, when an account freeze could trip up a trip in a bad way.
Avoiding such hassles, he said, is much easier when the account-holder has called ahead and alerted the bank to a coming trip or large purchase. But even the best physical security, he said, can't account for the random encounters that can occur overseas.
Some retailers in overseas tourist spots, Grote said, have developed a reputation for being associated with debit card fraud, and trigger automatic alerts. There is no way the average tourist would know that a certain bodega or beach store was so suspected.
“But there is a naughty list, and people should be aware of that,” Grote said.