According to Analysts Banks are Tolerating Credit Card Fraud to Evade Customer Embarrassment

Dow Jones reports that affluent professionals are becoming perfect targets for credit card frauds as several banks are hesitant to expose their most well off cardholders due to discomfiture over declined transactions.

There has been a major increase in credit card frauds especially on the Net. This is expected with many more companies acknowledging online transactions. It is seen that the fraudsters target the clients more often than the technology. This is more about tricking card holders to reveal card details and not about hacking into their computers.

The analysts updated, Andrew R. Johnson, the Wall Street Journal reporter that it was possible for advanced new tech tools to detect as well as predict fraudulent transactions based on the concurrent analysis of the spending pattern of the cardholders. Evaluations of preferred merchant locations, types of product and dollar amount, suggest that the account has been hacked. On the other hand, some well-off cardholders change banks, when there is the normal best practice of rejecting the transaction or asking for a merchant phone call.

Credit card issuers prefer to depend on transaction alerts to combat this fraud. Bank representatives informed Johnson that a number of credit card issuers are advocating real time transaction notifications sent through applications of the smartphone or text messages. When cardholders alert the bank about the fake transactions quickly, it is possible for the investigators to track the criminals. This will trigger account safeguards and card replacement options. Avivah Litan, a Gartner analyst, explains that just around 1 in 20 high value transactions generating security alerts really are a consequence of fraudulent activity. As per the analysts, there are a number of banks who would rather fix the fraudulent transaction rather than risk the possibility of annoying an affluent patron.

Credit card fraud world has a new language and words such as "phishing" "skimming," "shoulder surfing" may sound less immoral than "stealing," but they are the methods of stealing dollars off the credit card.

It was reported by Dow Jones that a group of credit card skimmers had targeted 50 American Express clients in New Jersey, New York and Connecticut last month. Around 28 suspects used their skills in costly restaurants to clone and skim the credit cards of wealthy diners according to CBS New York report.

Doug Nicholas

Doug Nicholas, a financial consultant by profession with a Masters degree in International Business from Brown University, is also an ardent writer. Though he has a full time job at one of the companies listed on Wall Street, he does manage to squeeze in time to follow his passion. He puts his ideas to words in his articles related to finance and business.