CreditCards.Com Study: 39% of Fraud Alerts Are Triggered by Legitimate Transactions
A new report from CreditCards.com found that more than half of customers who received fraud alerts had false positives.
A polling of 1,000 adults founds that 38 percent had received fraud alerts at least once. Of this group of consumers who had received fraud alerts, 39 percent said that all the alerts were in error while 14 percent had mostly legitimate transactions that triggered fraud alerts.
Only one in five blocked transactions were actual cases of fraud.
While a fraud alert may be a simple inconvenience, what a financial institution chooses to do after flagging a transaction can have a drastic impact on the payment experience of the consumer.
The issuing bank usually validates the transaction based on risk scores that factors in location, purchase history, along with a host of other elements.
The financial institution can either block the transaction, causing major friction for the consumer if their purchase is legitimate, or the FI can choose to flag the purchase after it goes through to follow up with an investigation.
Thanks to the prevalence of smartphones, financial institutions can validate a purchase through text, email, and the trusty customer service representative to reach their cardholders directly after purchase. By embracing a proactive approach, financial institutions can both better secure customers while lowering the friction of having to decline transactions at the point of sale.