What Do You and a Credit Card Thief Have in Common?

By Linsey Knerl. Last updated 10 December 2008. 22 comments
Photo: EAWB

I've always considered myself to be an educated credit card user. I keep my balances low, pay on time, and don't do anything that could potentially come back to haunt me.. Little did I know, that by playing it cool, I was putting myself at risk for being treated like a criminal.

Remember my recent Kmart Double Coupon excursion that left me more than a little irritated? Part of my frustration stemmed from the outcome of my purchase – or rather my NON purchase. I never got to buy all the goods in my overflowing cart that day, and the major cause of my headache was the decline of my credit card. For real.

I don't play games with my credit. I kept this card in my wallet, but barely used it for in-store purchases. I think I had used it to reserve hotel rooms from time to time, but almost always ended up paying with cash or a debit card when it came time to check out. The card was a little worn from carrying it around all that time, but really didn't get much swipeage (if you know what I mean.)

Your money is no good here.” Upon entering the checkout line, I tried to swipe the card. Apparently, the reader machine was having a hard time making sense of my card. The Kmart cashier suggested that I put a plastic bag over the card and try again. No go. So I suggested that she type in the numbers manually.... after some discussion with a manager, she did. My card was declined. I was flabbergasted.

I tried, unsuccessfully, to use other methods of payment, but due to the code that was coming up for why my card was declined... I couldn't get any other method (including check) to work. I left fuming, and received precious advice from the Kmart cashier. “That's why I always carry cash.” Thanks, lady, but we're talking over $350 cash, and with all the muggings going on in my area this time of year, I think I'll pass.

I hang my head in shame... and confusion. I felt like a loser, but I wasn't sure why. I got home and immediately noticed an email from my credit card company, alerting me to “problems” with my account. I called, and I was told the following:

  • This time of year is ripe for credit card fraud, so my card (along with every one else's) was being monitored especially well

  • My account was showing “suspicious” activity, specifically, a $16 Subway charge and a $30 gas charge – all in one week.

  • Because of the shocking nature of the recent flurry in activity, my card was flagged as suspect for fraud. (I.e., they thought that the two charges in one month was a little shady, so they froze my account... hours before I headed to Kmart.)

  • They were very sorry, but they have to think of the safety of their customers. Big purchases (like that monster charge of $200+ at Kmart) was unspeakably high. It could only mean theft.

OK.... so I argued (politely, of course) with the rep. How can I possibly use my card if small charges like this could be flagged as fraud? What if I was traveling out of town and needed to crash in a hotel slightly nicer than the Wagon Wheel Inn? Would the $80 charge throw my account into a meltdown? How could I be sure I could count on my card?

After a long letter to the executive office and a phone call later, I got everything straightened out (and a nice compensation of award points, to boot.) Basically, there was no surefire way any one of us could guarantee the same thing wouldn't happen. Here's what was recommended, however:

  • If you plan on using your card after a period of long inactivity (sitting in your freezer, perhaps) start slow, make many small purchases, and work your way up to larger purchases. Be prepared for it to cause an alert to be placed on your card, and carry a backup method of payment, if you can.

  • Be aware of your spending patterns. In my case, my credit card had only two charges each month for over a year. They were recurring charges for Netflix and my newspaper, so they were very predictable. When my spending went OUTSIDE of this pattern, it alerted my credit card company. It might help to call ahead and let them know if you plan on making large purchase outside of your pattern, or if you are going to be out of town with a need for easy access to funds.

  • Monitor your card carefully. Just because they caught my intentional purchase, doesn't mean they'll catch everything. Small fraudulent purchases are more likely to go under the radar and cause financial damage than large ones. Read your statements every month.


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Guest's picture

Really, none of this is necessary. All this sums is to, you need to have a credit card through a company with proper working fraud system.

Stop using the card and get a card from a company that has reputable service (you are more likely to receive better service from a credit union than a bank), it is very possible you will be able to find a better card as well.

Guest's picture

Hmm can't add more to my comment.

I also wanted to say, no one should have to deal with this sort of disservice from a credit card company. I really can't imagine a credit card company screwing up much more than this (though I am sure the credit company involved here, whoever it is, will certainly try). There is no need to go to extremes to monitor your spending habits.

Guest's picture

I was just wondering if there was a customer service number on the card that you could have contacted while at the store. Or at least have your credit card company in your cell phone so you can call them in case you have any issues (like it being rejected for fraud).

Guest's picture

I think the fraud system works quite well, saved me a bunch of trouble(and I'm sure it saved the CC money) when the same thing happened to me, except I really wasn't the one using my card for purchases. It had been stolen and I hadn't even realized it yet... The MO of thieves is to test the card with small purchases at gas stations, buying cigarettes, snacks, gas... then if everything goes smoothly, they go on a shopping spree, in my case, Walmart and the grocery store.

I never used the card to purchase gas or buy groceries, the CC system recognized this and flagged the account. They called me and asked if I had been using the card, I thought it was a joke... until finally the woman said, go and see if you have your card, turns out someone had stolen my wallet out of my purse at work.

So I think the credit card company was right in shutting your card down when they detected behavior that wasn't normal... for a person that doesn't use the card to make small purchases like Subway, it seems like what they did made sense-- yeah, it's embarrassing to be declined... I wasn't so lucky in catching all of the checks they had forged around town and it was a pain clearing that mess up with the checking validation companies, but in the end... I would rather go through a little embarrassment then have to deal with weeks of filling out fraud paperwork and sitting on the phone in customer support hades forever.

Julie Rains's picture

A fraud alert happened to me several years ago. I bought a large appliance (something I might buy every 10-20 years) and my cc was placed on fraud alert for being an out-of-pattern purchase. The $800 purchase went through without a problem but my next purchase  at the gas pump, I couldn't pay for $10 worth of gas. I contacted the cc company, found out about the fraud alert, and had the alert removed; the company said they were were just waiting for me to call to make sure my cc wasn't stolen.

I had heard of fraud alerts but thought that flagging an appliance purchase wasn't a good mechanism for detecting out-of-pattern purchases so I never used that card again. I never have had a problem with other cc companies, though one did detect fraud of small purchases in another state. So, it seems that not all fraud detection methods are created alike.

I don't carry large amounts of cash around either, just a couple of cc's in my wallet.

Guest's picture

I've never had that happen to me, but whenever one of us goes out-of-state, or when we've driven across the country, we've always received a call from our bank making sure that it was us making the transactions.

Myscha Theriault's picture

I've had that happen before both with the credit card and with the debit card. Once someone had actually snagged the number from a store I had used it at legitimately and used it to buy several thousand dollars worth of tile. So, I was glad they caught it.

Another time my card had been used at a place that had been compromised for security, and they were testing to make sure it was me. Don't get me wrong, Linsey. It was absolutely a total pain in the butt. And you're right, it's hard to be standing there in front of a bunch of people you don't know and your card not working.

In the end, I guess it's better than having to deal with the alternative. Getting a new card can be a serious pain, even if it's just a replacement card. The numbers will be different, obviously. So all of the items you had on auto pilot (Netflix and your newspaper for example) need to be set up again. Ditto with Amazon stuff and other similar situations.

Guest's picture

I've had my credit card company call me when my purchases went outside the norm. Apparently it's not uncommon. What makes me wonder about other's experiences is that it seems like the at least some company's policies have changed in that they wait for you to call rather than calling you.

Now, especially when I'm going to be traveling somewhere I don't normally go and especially if the plane ticket isn't on the same credit card, I call my credit card company before I leave. That way they can put a note in my account that I'll be in this city/area during these certain dates and they should expect some charges. This works out really well and saves everyone lots of time and hassle.

For those who are going to be changing their spending habits quickly (or changing locations or whatever) I recommend calling the card company and letting them know what you're expected. By working with the company you can probably avoid a lot of these types of hassles.

Guest's picture

If you're going to be doing something with your credit card which you know is unusual for you, you can call your credit card company ahead of time and alert them to your plans.

I traveled to Russia and knew that I couldn't count on any one of my ATM or credit cards to work over there at any given time or place. I also knew that Russia is an epicenter of credit card theft usage, so any legitimate activity on my part might well look suspicious. I didn't want to be stranded in Russia with no access to my money. So I called up the banks that held my money and my credit and I gave them a head's up. I told them which cities I would be in and when I would be there, which airports I would be connecting through, etc. They were both delighted and stunned to have me proactively giving them this information. The rep I spoke with said they almost never get such calls, and they were extremely appreciative. I never had any problem at all during my travels.

Just saying. It may be a bit of a hassle to make such calls. But if the alternatives are either huge frustration or credit theft, I'll take a measure of proactive hassle.

Guest's picture

Similar thing recently happened to me--I had a card issued for my husband on one of my accounts, but he never uses it because he has his own "faves". But then he used it twice in the course of a week (gas and a DVD vending machine!) and the account got flagged.

But it sounds like part of the problem was not just that your card got declined, but that your purchase was blocked at the store via any method of payment. They should have a way that to contact the CC company and get it cleared--that's worth an angry letter to Kmart about.

Linsey Knerl's picture

Some of you brought up some good points that I'd like to clarify:

1.  I did call the credit card company from the store.. the number would ring once, and then would disconnect.  I tried numerous times from both the store phone and my cell, with no luck.  Turns out that they had a system outage for two hours the day that I was in the store.. and that their phones weren't able to operate correctly.  This had never happened before, and it was part of the reason they compensated me to generously for my trouble.  Just my dumb luck, huh?

2.  As far as other methods of payment not being able to work, I'm still trying to resolve that matter.  Kmart has a partnership with a check clearinghouse company, and they "preapprove" purchases made with personal checks and bank-issued debit cards.  They really wouldn't give me much information after calling their corporate office.  All they could tell me was that they use my past history (based on my drivers license, the number of checks I've written, the amount and check number) to determine if I'm a good credit "risk" before allowing my check to go through.  Even though I've never written a bad check, and there was PLENTY of money in my account, they were somehow predicting I was an enormous credit risk.  I'm not sure if it was due to the other CC being flagged or not.  Their only solution for me was to apply for a VIP check writing account, which would bypass some of the credit risk rating practices.

All in all, the entire situation probably could not have been avoided in this particular case.  I do love my credit card, the company has always been more than professional, and I'm willing to work with them for the stability, low APR, and rewards that I earn.  I just need to be aware.

I also want to add that more and more credit cards are employing similar procedures (if they are not doing so already), so switching cards may be a short-term solution. (Especially as we see the economy driving more questionable card practices among consumers and criminals.)

Thanks for the comments!

Linsey Knerl

Guest's picture

First, Kmart is an armpit of a company. They don't like to even exchange their own items, much less give a refund. Everytime I've had problems, so I don't shop at that dump any longer. Also, many of their stores are not only dirty, but very messy and unkempt.

As far as credit, I've had ALL my companies call me at home (at the very least) after a purchase or cash advance. It was the "fraud" division wondering if I had actually made the purchase.


And these are the theives that we are "bailing out?"

Guest's picture

I did the same thing as Kate and called my CC company before heading to Europe. This was good for two reasons: one, it avoided any "fraud" issues over there, and two, it prevented the card from being used here in case it was stolen and brought back over here. I had to call my cc company when I landed back in the states to tell them I was home.

As far as companies not calling you but waiting until you call them, I think that's a great idea. Yes, it's a bit of a pain, especially if you're trying to buy something at the moment, but it's a great way to avoid phone scammers. I would never give out valuable information if someone called me and wanted to discuss financial matters.

Guest's picture
Amy K.

We bought appliances at Sears in the spring, and the purchase was flagged. Not only did the salesperson have to call American Express, but American Express called our cell phone at the same time(!) to verify the purchase. We did the initial purchase, realized we didn't get the discount we expected, and the salesperson voided and re-ran the transaction, which caused the confusion and the calls. I was pleasantly surprised that they called us.

In 1999 I did a cross country road trip with a buddy, and Citicard called my house to verify the activity. If I hadn't called them back, they would have cut off the credit. Fortunately I was living at my parents' house, and they could relay the message, plus Citicard gave me a few days of leeway to call back. I didn't have enough cash to drive home if my credit had been cut off right then.

Last month we went on our honeymoon to Europe, and didn't call American Express to warn them we would be out of the country. Amazingly, the account wasn't flagged. I'm not sure if that was because a) we bought the flights on that card, b) we only made 3 or 4 purchases, or c) we buy a lot of stuff online, so our transactions are frequently outside our home region. I am a little surprised they didn't try to contact us or flag the transactions.

The refusal by Kmart's check company to take your check is pretty surprising. I can see that they wouldn't want to take too many risks, and $350 is a lot of money, but this time of year, with the Christmas shopping, it seems like a common enough amount.

Andrea Karim's picture

#12 - Limit slashing is becoming common - it has nothing to do with your credit history and everything to do with the fact that banks can't borrow money like they used to (and with that bailout money being used to pay huge bonuses to the heads of companies like AIG, it should be no surprise that the bailout isn't working), so banks are trying to make sure that you don't borrow any more from them. They borrow money to give you money, and now they can't borrow, so they want to prevent you from borrowing.

Linsey, my bank card was denied at the checkout at REI yesterday. I had used the same card the day before at the same store. My bank didn't call me or issue and alert, just denied the card, even though I know that I have thousands of dollars in the account. It was SO embarrassing to have someone say "Wow, this is being denied. Do you have another card?". Thank goodness I did.

There are all kinds of triggers that set off fraud alerts - keep in mind that the triggers are recorded and set off by software algorithms that analyze fraud. Buying stuff at the same store two days in a row after not using an account for a while is a trigger. So is filling up at a gas station and then going to an electronics store and making a major purchase. Frustrating, but true. Sorry you had to go through that.

Guest's picture

I went to Britain in Sept and before we left I called the Credit Card companies and my bank. I knew I'd want to use the ATMs to get pounds (I'd heard it was cheaper than other methods) and use the cards a lot to charge things.

There were all "no problem; it's recorded on your account." I get over there and none of my cards are working. Two credit cards and an ATM card and all I have is a little bit of money I had converted before I left. They called my home and left messages (which family picked up two days later when checking in on my home). It took days to get it all straightened and I have difficulties with the ATM card for most of the trip.

I've had my card flagged before for suspicious activity for the oddest things and while I appreciate the concern, I went out of my way to avoid the problem this time and it caused major headaches.

Beware--definitely call the companies before the trip--but have backup plans and phone numbers with you, in case they are as incompetent as my bank was.

Guest's picture

Apparently, this was your first brush with anti-fraud account monitoring. I am sorry you were inconvenienced.

However, all you have to do if this has happened is to inform the credit card company that it is actually *you* using the card and that the purchases are valid. Have them put the sale on hold and go stand outside the checkout line and call the 800 # on the back of the card while you are in the store (the store might even let you use their phone if they think they will get a sale out of it) and tell the customer service rep that your charges were just rejected. They will say "oh yes, I see that your account was flagged by our fraud monitoring system" and you say,basically "well, it's me, please allow the charges" and they will, after asking you some verifying info.

I would not recommend making charges and "building up" your credit usage to avoid this when a simple call to the credit card company fixes it. YOu can even call them beforehand (and should) if you are planning on doing something unusual like traveling to another part of the country and charging two thousand dollars on the card when normally you never use it. They will put a note on your account so that your charges get approved.

It really is a feature, not a bug.

Guest's picture

Ok, why are people "embarrassed" when their card is rejected? Don't allow a computer authorization message to make you feel bad. The computer isn't saying you are a bad person, it's just saying that for whatever reason it is not going to give the store an authorization code for the purchase, or that it *thinks* there are insufficient funds (whether that's true or not is a separate question) or whatever. Don't let it weigh down on your self-worth or self esteem.

Trust me, I work in retail and it happens multiple times a day. It can be a problem with the bank account, the authorization network, or whatever. Who cares. It says absolutely nothing about the person whose card it is.

Think about it.

Guest's picture
Liz Kay

My frugal parents have triggered fraud detection warnings when they've gone on some rare shopping sprees, but it was handled in a very intelligent way. When the store clerk swiped the card, it instructed them to call the CC company on the spot, who then spoke to the cardholder to verify that the card had not been stolen. After the confirmation, we were allowed to continue the transaction.

When my own credit card number was stolen, however (entirely my own fault) I kept getting automated calls from a fraud detection service I didn't recognize. I was afraid it was some sort of telemarketer, but turns out it was a contractor for my bank. It took me a full week to check out my account and discover that some fool in Hartford, Conn. had run up thousands in charges in Marshalls, PetSmart and Walmart.

Linsey Knerl's picture

I'm glad you reminded readers to contact their cc company at the scene of the decline.  Kmart was initially more than patient to have me put my purchase aside (much to the dismay of the people behind me -- they were not allowed to check out until my problem was resolved), while I called my cc company.  I did call the number on the back of the card, but their phones were down momentarily (the main reason why my account was generously compensated for my trouble.)

I would suggest that others not be made to feel ashamed, but if it is the first time it has happened to you, and the store makes no differentiation between a genuine theft case or bad credit incident and an unlucky schmuck like me, the staff and other customers get crabby, accusatory, and rude.  It's hard to walk away from that with 100% of your dignity intact.  But then again, I should just learn to get over it.  I didn't do anything wrong.

Thanks for your comment!

Linsey Knerl

Guest's picture

I'm sure it was inconvenient for you, but I'd rather have my CC companies error on the side of caution.

Using a stolen credit card at places like Walmart, Kmart, Target, etc... is pretty common. Recently one of my friends had their wallet stolen and within hours they had two $300+ Walmart charges on their account.

I'm happy when businesses check to make sure that I am who I am, and I'm actually the one purchasing stuff with my cards. I can only think of twice that this happened, and I was happy both times.

Just for the record - one time was when I bought tickets for an out of state concert, and another was when I ordered a bunch of music equiptment online.

Guest's picture

Considering worn-down stripes, system errors, merchant bank downtimes, fraud alerts, payment delays (why, yes, I do work for a bank!), and other miscellaneous quirks, it's amazing credit transactions ever process successfully. I carry an "in case of emergency" card with a small limit to tide me over until I can call the bank.