Teaching teenagers important personal finance lessons is sometimes as easy as waiting for situations to happen, and then discussing them. An attempted purchase, and a subsequent phone call the next day was a great example of teaching my son about how seriously banks take fraud prevention.
My son approached me late one evening to discuss making a significant purchase. He has been getting into video editing, specifically footage for online gaming blogs. He’s been using a free version of a specific software package, which limits some of the more advanced options and he wanted to purchase the full version. After discussion we agreed that he could make the purchase. The next morning, however, he said that for some reason the sale would not go through. The error message indicating the card was declined. We both verified he the funds in his account, so he sent an email to their technical support.
When I returned home that afternoon, our home phone had a voice mail from our bank. The voice mail was addressed to my son, requesting he call the bank to discuss recent purchase attempts. I called him down from his room and had him listen to the message, indicating the reason his purchase failed was because the bank’s system flagged it as potentially fraudulent.
“That’s a thing?” he asked.
“Yes, that’s a thing,” I answered, laughing.
“Yeah, they called me too, but I hung up on them thinking it was a scam,” he replied.
“You’d better call them back,” I instructed.
Banks will decline purchases on credit or debit cards if they think it may be a fraudulent purchase, or in other words if they think your card has been compromised. There are several reasons why a financial institution might detect a purchase as fraudulent and they all have to do with analysis of how you normally use your card:
- Location : If a charge is made at a retailer on the other side of the country from where you live, it may appear as if your account has been compromised. It could also mean you are simply traveling. Many times you can prevent this type of failed purchase by telling your bank when and where you are traveling.
- Large Purchase : If your card is used in a larger than usual transaction, your bank may want to speak with you before letting it go through. I believe this is the one that triggered in my son’s case.
- Amount of Purchases : If a large number of purchases are made in a very short period of time, your bank may question what is going on.
In summary, banks try to analyze your spending patterns, and straying from them may trigger a fraud alert. Sometimes it may a valid purchase, in others the bank may have saved you from a financial headache.
How about you, Clever Friends, have you ever had a purchase declined because your bank thought it detected fraud?
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Brought to you courtesy of Brock