topic Re: lol Capital One Fraud Protection in Credit Cards

lol Capital One Fraud Protection

Anonymous — Sun, 04 Mar 2012 02:35:27 GMT

Hey there, everyone,

Thought I'd brighten everyone's evening with a humorous story this evening of Capital One's funny logic.

I have a Capital One No Hassle Cash Rewards card (the one before the new green one.) $1500 CL, a year old, and despite what anyone says, I love this card because it fits my purchasing style. Will app for the green cash rewards towards the end of the year, give some time for my inqs and 2 new accounts to age.

Anyway!

I placed an order today from CDJapan.co.jp. They charge in Japanese Yen, which is the whole reason I love the CapOne - no foreign transaction fees!

Not a big deal, because I've purchased from them before - in fact, December was a huge order for a whopping 19,623 JPY ($252.29 USD.)

However, this time I included a pre-order for a few items that haven't been released yet. I usually pay with PayPal, but PayPal charges your card immediately because that's how they operate. This means the order is immediately finalized, and I can't add items to the order in the coming weeks to combine for shipping.

SO, this time, I decided to pay straight with the credit card, as they will only place an authorization, and then wait until all items are ready for shipment before charging.

I add the Capital One to my account and proceed to checkout.

Once the checkout process completes, I get a confirmation screen that says:
Status: Credit Card Authorization Approved

Excellent.

I then check my email as I've received an email confirmation of my order.

Order Confirmation #************** (This number is not important. )

Everything is normal, except almost immediately afterward, I get a new message popping up in my inbox:

Capital One Fraud Protection Alert

Umm, what?

It says it's detected suspicious activity, and needs me to call a number to verify the charges.

Keep in mind, 35 minutes earlier, I had placed an order at another shop that had already successfully charged the card 6,542 JPY, but through PayPal.

Okaayyy...

I call the number and reach Capital One's Fraud Protection department. Apparently, that first charge was completely fine, but it was the second CDJapan charge that tripped the system. Not too difficult, verify some info and if I recognized the merchant that made the charge, and they removed the block and let me on my way. However, something's bugging me..

The card has detected what it deemed to be suspicious activity. It was a fairly large charge in a foreign currency (14,543 JPY) so I completely understand a possible flag. However, I have purchased from this merchant before, and EVERY charge that has ever hit my Capital One card has been in JPY. The only thing that I changed was removing PayPal from the mix. But more importantly, if it deemed the charge suspicious, why did it approve the authorization and then decide to lock down the account? Why not block it from the very beginning and fail the authorization if it triggered a red flag?

I asked the representative this. And of course, she was unable to answer. In fact, her voice began sounding shaky as she was unable to figure out the logic, while she continued reading from her script about how the system decided these things. In the end, the only tidbit I got was perhaps there was a mismatch with the CVV2 code on the back of the card. This made sense, as for whatever reason, CDJapan did not ask for the code. But the main problem is if this is supposed to protect my card from unauthorized use, what good does it to do protect me after a charge has been approved? In either case, it was clear she had no idea, so I thanked her and went about my business.

3 minutes later, I receive a phone call on my home phone (I called via my cell.)

"Hello, this is Capital One's Fraud Protection department...."

... I'm pretty sure I just dealt with this. Cue all of the above happening again with a second representative. Except, at the very beginning I told her i literally just handled the issue with their department. She decides we have to do it again, anyway. Oh well.

Nothing overly bad, I guess. Just a humorous story.

Have a good evening, everyone. xD

Re: lol Capital One Fraud Protection

Anonymous — Sun, 04 Mar 2012 03:57:30 GMT

I experienced the same thing with BofA - charge was approved only to be unapproved later that day. What's worse I didn't hear from them at all. Found out b/c the item was supposed to ship same day and it never did so I called BofA and they told me the charge was blocked for suspicious activity. They couldn't even reverse it for me. Talk about horrible customer service.

Re: lol Capital One Fraud Protection

aussiesareforever — Sun, 04 Mar 2012 05:08:27 GMT

Pretty funny. I can always count on a Cap1 story to make my night.

I guess it is good to know that they are at least checking

Re: lol Capital One Fraud Protection

Anonymous — Sun, 04 Mar 2012 05:55:30 GMT

LOL!

Re: lol Capital One Fraud Protection

LS2982 — Sun, 04 Mar 2012 10:30:55 GMT

Well at least they called....It's the thought that counts!!

Re: lol Capital One Fraud Protection

navigatethis12 — Sun, 04 Mar 2012 12:59:36 GMT

Fraud protection is indeed weird. A few weeks ago I made a charge of $5000 on my PNC card and it went through no problem. Fast forward a few days, I buy something for around thrity dollars and an hour later they ring me and say the charge seemed suspicious. Yet $5000 can go through with no problem at all. I may be because I don't use the card for small purcharses but still, it seems backwards to me.

Re: lol Capital One Fraud Protection

LS2982 — Sun, 04 Mar 2012 13:12:37 GMT

@navigatethis12 wrote:
Fraud protection is indeed weird. A few weeks ago I made a charge of $5000 on my PNC card and it went through no problem. Fast forward a few days, I buy something for around thrity dollars and an hour later they ring me and say the charge seemed suspicious. Yet $5000 can go through with no problem at all. I may be because I don't use the card for small purcharses but still, it seems backwards to me.

They look at your spending patterns and if you come off if it just a little they get spooked. I use my Barclays for high/low charges and haven't heard a peep.

Re: lol Capital One Fraud Protection

Anonymous — Sun, 04 Mar 2012 17:12:16 GMT

I'm glad everyone's getting a good kick out of this! xD

@dyv8914 - Wow that sucks! If it were me I would've gone ballistic on them, but partly because I hate waiting for shipping, haha. I guess it's a good thing I avoided BofA cards, though, judging by how many threads here are overwhelmingly negative about them. Thankfully for me, it was only an authorization, so even if it was revoked after it got approved, it didn't make a difference, as the actual charge will come in a few weeks.

Fraud protection can get wonky, but my main issue was why would this so-called protection kick in after the fact, and not before?

In my mind, it's like letting a suspicious person out the bank doors, and THEN locking down the entire bank. And in dyv8914's case, having a guard run after the guy and drag him back inside. Yes, that suspicious guy could've been a thief, or he could've been a legitimate customer who decided on some very bad fashion that day. But it makes the most sense to lock the place down and confirm BEFORE he leaves through the doors.

I guess the takeaway here really is that spending patterns are being heavily observed.

As far as I can remember, this may have been the one and only time I've ever NOT used PayPal when charging to these Japanese stores.

As well, at least for Capital One, make sure your shop asks for a CVV2 code, and that it matches, because the rep singled that one out as a definite flag raiser.

Re: lol Capital One Fraud Protection

navigatethis12 — Sun, 04 Mar 2012 18:00:33 GMT

@LS2982 wrote:
They look at your spending patterns and if you come off if it just a little they get spooked. I use my Barclays for high/low charges and haven't heard a peep.

I figured that, but still, I would not be too concerned if someone fraudulently charged $30. It's money yes, but easily disputed.

@Anonymous wrote:

Fraud protection can get wonky, but my main issue was why would this so-called protection kick in after the fact, and not before?
In my mind, it's like letting a suspicious person out the bank doors, and THEN locking down the entire bank. And in dyv8914's case, having a guard run after the guy and drag him back inside. Yes, that suspicious guy could've been a thief, or he could've been a legitimate customer who decided on some very bad fashion that day. But it makes the most sense to lock the place down and confirm BEFORE he leaves through the doors.

I thought the same thing. After the fact is a bit silly. The example you gave happened to me in highschool, except in a hospital. My telephone was turned off (as instructed to do) and we toured around the whole building. After we were back on the bus they wanted me to go back into the hospital and relinquish it because I could have killed someone by interferring with life support machinery.

From what I understand with the fraud department though, is that there is a list of accounts with charges that humans go through manually. So it isn't instant that it is declined because a human has to check it. If the system thinks it is really out of the ordinary it will automatically move it up the list though. That is what a friend told me anyway that works in a fraud department.

Re: lol Capital One Fraud Protection

Walt_K — Mon, 05 Mar 2012 01:55:26 GMT

I don't find this that odd. They have a history of you charging with PayPal. They don't have a history of you buying things online from a Japanese website. When you remove PayPal from the mix, it changes the transaction, and that's what I would think woudl trigger the alert.

As to shutting it down afterward, it's really more about protecting them. You're protected from fraudulent activity. They need to shut the card down to limit their losses. So it's not that weird to shut it down afterward. Otherwise, the person keeps on charging. And I'm assuming they could process a chargeback or something since they acted fairly quickly (I don't know how CC processing works exactly).

Re: lol Capital One Fraud Protection

Anonymous — Mon, 05 Mar 2012 20:01:00 GMT

What is a CVV2 code? Is that the 3 digit number on the back of the card?

When doing online shopping I really feel most comfortable with sites that ask for not only the card number and 3 digit code, but your billing address as well. If all sites did this it would cut down greatly on fraud I think.

Whenever I go to a restaurant I always get a little nervous when the waiter takes my card away to pay the bill. I didn't worry with just my debit card but now that I am using more prestigious cards that imply being well off (Chase Mileage Plus explorer for one) I always fear a dishonest waiter will write down my expiration date, card number, and 3 digit code somewhere then try to use the card, if all sites required billing address for verification then nobody could use my card even if they copied all my info, unless they knew where I lived.

Re: lol Capital One Fraud Protection

Walt_K — Mon, 05 Mar 2012 20:22:52 GMT

@Anonymous wrote:
What is a CVV2 code? Is that the 3 digit number on the back of the card?

When doing online shopping I really feel most comfortable with sites that ask for not only the card number and 3 digit code, but your billing address as well. If all sites did this it would cut down greatly on fraud I think.

Whenever I go to a restaurant I always get a little nervous when the waiter takes my card away to pay the bill. I didn't worry with just my debit card but now that I am using more prestigious cards that imply being well off (Chase Mileage Plus explorer for one) I always fear a dishonest waiter will write down my expiration date, card number, and 3 digit code somewhere then try to use the card, if all sites required billing address for verification then nobody could use my card even if they copied all my info, unless they knew where I lived.

As long as you check your card activity fairly regularly, you should be able to spot anything unusual, and the dispute process is pretty simple in my experience. Fraud protection on credit cards is pretty good. You should feel less nervous with the credit card than you did using the debit card where the protection isn't as great.

Re: lol Capital One Fraud Protection

LS2982 — Tue, 06 Mar 2012 00:10:58 GMT

@Walt_K wrote:
@Anonymous wrote:
What is a CVV2 code? Is that the 3 digit number on the back of the card?

When doing online shopping I really feel most comfortable with sites that ask for not only the card number and 3 digit code, but your billing address as well. If all sites did this it would cut down greatly on fraud I think.

Whenever I go to a restaurant I always get a little nervous when the waiter takes my card away to pay the bill. I didn't worry with just my debit card but now that I am using more prestigious cards that imply being well off (Chase Mileage Plus explorer for one) I always fear a dishonest waiter will write down my expiration date, card number, and 3 digit code somewhere then try to use the card, if all sites required billing address for verification then nobody could use my card even if they copied all my info, unless they knew where I lived.
As long as you check your card activity fairly regularly, you should be able to spot anything unusual, and the dispute process is pretty simple in my experience. Fraud protection on credit cards is pretty good. You should feel less nervous with the credit card than you did using the debit card where the protection isn't as great.

Re: lol Capital One Fraud Protection

Anonymous — Tue, 06 Mar 2012 00:47:45 GMT

Yes, the CVV2 code is the 3 digit number on the back of Visa/MC cards. AMEX's is the 4 digit code in the front.

Walt_k, I realize that there is an established pattern, and I know why they did what they did.

It just seemed more logical to me that if the system thought anything was amiss, "better safe than sorry" and deny first, then ask questions later.

But then again, "logic" with these companies is sometimes otherworldly.

Edit:
On the other hand, my current "main" card is my Chase Freedom card, and I run absolutely everything through there.

Never had an issue, so I guess to them my pattern is just constant spending everywhere in the US, though usually online.

Re: lol Capital One Fraud Protection

Anonymous — Tue, 06 Mar 2012 05:14:41 GMT

I have had worse where my card was fraud locked for making regular purchases locally and I had to spend a good chunk of time figuring out why since Bank of America didn't send me any notice, but I didn't sweat it. I settled the transactions in cash to lower the akwardness.

To explain it a little bit though...

You said you usually use PayPal. When you do this PayPal will convert the JPY to USD automatically (by default) and settle the transaction as if it originated in the US (this allows eBay/PayPal to make more money via the spread on what they sell you JPY for). Once you took PayPal out of the picture your transaction showed up as raw JPY. Foreign web based transactions always throw up red flags. Fraud complaints could also be very common from that seller (especially since they didn't request a CVV2) and played a major factor.

That being said, they will authorize first because it makes the situation better for you as the user. Instead of having a hard decline and then being asked to call them they can authorize, keep in mind an authorization is NOT an approval, the transaction and let you call them prior to the transaction settling. If that occurs you'll get your order shipped without any disruption, but the bank still has the option of cutting the transaction if you tell them it is fraud.

As I said earlier, an authorization is NOT an approval. Any authorized transactions have to be submitted for a real approval within a specified time frame. The charge is actually pushed through then and can be declined at that time.

Re: lol Capital One Fraud Protection

Anonymous — Tue, 06 Mar 2012 06:02:33 GMT

@Anonymous wrote:
You said you usually use PayPal. When you do this PayPal will convert the JPY to USD automatically (by default) and settle the transaction as if it originated in the US (this allows eBay/PayPal to make more money via the spread on what they sell you JPY for). Once you took PayPal out of the picture your transaction showed up as raw JPY. Foreign web based transactions always throw up red flags. Fraud complaints could also be very common from that seller (especially since they didn't request a CVV2) and played a major factor.

That being said, they will authorize first because it makes the situation better for you as the user. Instead of having a hard decline and then being asked to call them they can authorize, keep in mind an authorization is NOT an approval, the transaction and let you call them prior to the transaction settling. If that occurs you'll get your order shipped without any disruption, but the bank still has the option of cutting the transaction if you tell them it is fraud.

As I said earlier, an authorization is NOT an approval. Any authorized transactions have to be submitted for a real approval within a specified time frame. The charge is actually pushed through then and can be declined at that time.

Thanks for the explanation on the 2-step process.

I somehow already knew this, but had completely slipped my mind. You're right, authorizations usually result in a pending transaction that lasts for a few days before it gets "applied" to the account.

However, just a bit of clarification about my spending.

Yes, by default, PayPal will convert foreign currency to USD for convenience, among other things, such as them being greedy.

Because they are greedy though, they use very unfavorable rates. This was why I got the Capital One card to begin with, and as I said, every charge it's been given has been in JPY - not USD. I make sure to tell PayPal to charge my card in straight JPY without any conversion to USD.

Previously, I used my Chase Freedom, and was hit with the 3% foreign transaction fee, but I am certain it is still better than PayPal's highly unfavorable rates.

With the Capital One, I tell PayPal to send the raw JPY to the card, CapitalOne gives me a very good exchange rate (usually less than +/- 1 the USDJPY rate from xe.com) and no foreign transaction fee.

In either case, yes, removing PayPal probably did raise a flag, alongside the missing CVV2.

It went from PayPal charging JPY to CDJapan's gateway charging JPY.

Re: lol Capital One Fraud Protection

hyprble — Mon, 16 Apr 2012 07:34:42 GMT

Just wanted to chime in that I got a "possible fraudulent activity" e-mail from CapitalOne - I got charged (and credited) from Google, Match.com and Zoosk.com - So creepy to think someone's using my stolen credit card to scam other people they meet online!

After 20 minutes on the phone with the fraud department, I've got to wait a week for a replacement card. I am glad this happened on a credit card and not a debit card!!

Re: lol Capital One Fraud Protection

Kyva — Mon, 16 Apr 2012 12:30:56 GMT

I had a different experience with citi.

I used the citi card to place a ~$700 order online on tigerdirect.com for computer parts. The order did not go through. I logged on to my citi account and there was a notice asking me to call in. Called in and verify the transaction was initiated by me, then everything went ok. I don't remember if they sent me any email for fraud alert though.

Re: lol Capital One Fraud Protection

Adalen — Mon, 16 Apr 2012 15:09:50 GMT

I received a fraud alert from my Barclay Apple card when I started forwarding my automatic payments from Children's Book of the Month Club to them. I usually use it for iTunes, gas and lunch money, so I suppose that suddenly buying children's books seemed suspicious to them, haha.

Re: lol Capital One Fraud Protection

trumpet-205 — Mon, 16 Apr 2012 15:28:08 GMT

Always call them about foreign charge. I ordered some parts from a Canadian website and I called Capital One in advance. Told them where the charge comes from and how much was the charge. Painless.

I love Capital One for the reason of no FTF.

"Previously, I used my Chase Freedom, and was hit with the 3% foreign transaction fee, but I am certain it is still better than PayPal's highly unfavorable rates.

Capital One does not set the exchange rate. Exchange rate is definied by Visa, MC, AMEX, and Discover respectively.