Constant Fraud Alerts - High Falcon score

[erkme73]

After 15+ years with Amex, and a relatively satisfactory relationship, about a year ago, I started getting a lot of "card suspended due to suspected fraudulent activity" disruptions.  Timing was always at the worst possible moment, and usually in a place where cell coverage was spotty, and no internet.

It was happening so frequently, that I really started to lay into Amex - demanding that they reduce the sensitivity.  Not a SINGLE one of the suspected incidents were actually fraudulent.  They made promises, but the disruptions continued.  After having enough embarrassment to last a lifetime from all the "I'm sorry sir, your card has been declined" experiences, I finally decided to stop using the card.

I moved over to my local credit union's VISA - a card which I've also had for years, but only used when merchants didn't accept the Amex.  I talked to the head of their credit department, making it clear why I was changing - and that I wanted to make sure they wouldn't have me on a hair-trigger as well.

Needless to say, the disruptions continued.  Interestingly enough, the person that calls to "confirm" the last 5 transactions quickly blames the sensitivity of the fraud detection on the CU - saying that if we wanted less of these, we needed to talk to the CU.   After the third such disruption in less than a month, I contacted the CU and worked my way up to the person who appeared to know what's going on.  She said, unequivocally, the 'trigger' for a fraud alert has NOTHING to do with the CU/Bank but with Falcon fraud services.

I'd never heard of them.  But, according to this CU contact, Falcon generates a risk number for every card holder.  The higher the number, the higher the risk.  Falcon will not share the logic behind the score, claiming it's proprietary and making it known, would allow fraudsters circumvent the system.   So not even my contact at the CU was able to pry what I could do to reduce my number... which, by the way at the time was 947!  And technically, said my contact, she was not supposed to give me the number.

Aside from one or two unauthorized charges many years ago, I have had no fraudulent activity.  It would be nice to know what it is about my lifestyle, my spending habits, and history that is causing this crazy high number.  Because, as long as it is this high, I am going to have this issue, no matter who I choose for a card provider.

What is particularly upsetting is that Falcon has (presumably) trillions of data points on millions of card users.  They know whether you're buying lottery tickets, going to the horse races, and betting in Vegas (none of these things I do).  They compile this data without your knowledge, consent, or access, and then they assign a risk value to your being.  You can't verify what's on it.  You can't even know what it is that you're doing that's helping or hurting you.  If I recall, credit scores were like this for many years before Congress mandated access.   I'm sure the same "but it's proprietary" excuse was used then too.

As it stands, card users have no apparent rights with regard to a single company that has the ability to make card use unbearable.  In other words, if Falcon decided to make your score so high that 90% of your transactions were denied - in effect, making credit cards inaccessible and unusable to you - you'd be blacklisted, with no recourse.   Falcon has zero accountability.  I simply cannot believe that a single company would have this much unchecked influence.

That being said, does anyone have another perspective on this?  IS there ANYTHING someone in my position can do?

For the record, in my entire history of using credit cards (nearly 30 years), I have paid ZERO interest or late charges.  I've never carried a balance, and I have only two active cards (I have yet to officially terminate Amex because of an approaching cash-back anniversary).  I charge anywhere from 100 to 130k per year, and rarely exceed 35% of my credit limit on any given month.

It's been a while since I've checked my credit scores, but they were always in the low 800's.

[NikoD]

Interesting, thanks for posting this. I'd never heard of Falcon or any other service like that so I can't shed any light on your situation. I've used CCs regularly for 17 years and I don't recall ever having a CC declined or having any sort of fraud alert.

[lg8302ch]

I am a heavy online shopper and suffered also numerous times from stupid risk score...not sure if also Falcon...but at a certain stage the system does not even allow you to hit submit/send ...and this at merchants that have processed numerous orders on the past....changing credit cards does not help....well in combination with frequent online shopping I am travelling quite a bit and this mixture is a nightmare for US issued cards. This is why I never cancelled my European cards. These are reliable never ever any issues and I would never leave the country without my European credit cards. Also I never had a fraud, charge back or any negative with any US card issuers...still that risk score drives me crazy.

[barbaralee]

Amex does not use Falcon, they use their own fraud system. Falcon is the name of Enfact's product, but the bigger banks like Amex, Chase, USAA, etc use their own fraud system. It may be similar to Falcon, it may not. But your bank is the one who sets Falcon's fraud perimeters. 

[firesword]

looks like it is a FICO product: http://www.fico.com/en/products/fico-falcon-fraud-manager/

[gdale6]

If they are collecting data and generating a profile and/or a score they are in fact a CRA, you have the right to a free report from them once a year or if you are declined by a report or score that they issued just like any other CRA. Find out their address send a certified letter demanding disclosure of what is in their files, if they refuse file complaints with the FTC & CFPB.

[lg8302ch]

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@gdale6 wrote:

If they are collecting data and generating a profile and/or a score they are in fact a CRA, you have the right to a free report from them once a year or if you are declined by a report or score that they issued just like any other CRA. Find out their address send a certified letter demanding disclosure of what is in their files, if they refuse file complaints with the FTC & CFPB.

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The first thing I would do is put a freeze on it....if I could ...but assume that is no option and I doubt they get you a copy of your file. No doubt they are collecting  data but as CRA? I am going to try that mission if I can get their address.  It might not solve the problem but at least I will see what type of info they collect. ARS report was a surprise for me....off to Falcon..lol

Thanks for contacting us! We will get in touch with you shortly....let's see if I ever get a reply with a contact to request my file 

[cashnocredit]

Falcon scores and other fraud risk metrics use databases that are networks more than consumer specific.  That is they correlate addresses, phone numbers, purchasing patterns right down to the time of day, ATM withdrawals, and so on. From this they come up with a "score" that makes a risk estimate that any given transaction is fraudulent. The difficulty of CRA type rules is that it isn't the data in a consumer's file, but the correlation of attributes across other domains that includes fraud committed by others having only some proximate relationship. How can a consumer report even be created?

It's a dark corner of consumer credit and one that is complex enough that a Falcon score might not even be able to articulate the reasons or worse, that disclosing some reasons might impinge on other's confidentiality.

As an aside, one thing to explore is IDAnalytics.  The provide fraud risk scores and data and people can check their own scores at their site.

[Revelate]

Not much to add other than to say I think it's a small set of third parties handling it.

To wit, the exact same pattern of iTunes purchases on 3 different issuers cards, triggers an alert in my case.  Even if I do it again at some point a few months later on a same card, it's not learning my behavior: I think it's a base algorithm rather than a set of metrics on me as an individual.

While the technology is there to implement something like that, I don't think it's being used yet in all places.  Complex event processing is still in it's infancy comparitively.

[lg8302ch]

how to get out of this mess? Because of name, address, IP location, phone number or whatever these systems track I get a risk score close to the point where payment processing systems do not even allow to enter my card number anymore. This is with all network AX to Discover..how to overcome this hassle if travelling constantly. Right now my risk score is too high for Macys and HSN. It will eventually come down again but it is annoying. These are merchants with ton of successful orders but at a certain time I cannot use any cards to check out.  Macys phone orders still pass Usually 1-2 months later it will work again. Their fraud prevention system blame it on the card processors risk settings whoever that is.....patience with US cards if used abroad.