It’s been 10 years since the first time my bank called to tell me there was fraudulent activity on my debit card, and I still remember the panic that phone call caused. The representative asked me if I had authorized three transactions, totaling nearly all the money I had in my account – which I had not. It was the start of my junior year in college; that was all the money I had to my name, and it was earmarked for books. Walking down the streets of Albany, New York, I nearly broke down in tears.
The representative said not to worry, that the bank would cover the charges, and none of the money would disappear from my account. It was a seminal moment in my banking life – both in terms of customer care and in terms of adjusting to a new normal. (Full disclosure: Even that occurrence was not enough to keep me as a customer of Large Bank That Shall Not Be Named.)
In the decade since, I’ve had fraudulent activity on my accounts nearly half a dozen times, including, most recently, an unauthorized charge in France at the end of last month. While the customer service has always been outstanding, the technological response has evolved. That first time, I waited the requisite seven to 10 business days for my new card. It was inconvenient, but it was much better than losing all of my money. This last time, I received a call from the fraud detection department on Saturday afternoon, visited my local branch on Monday as soon as it opened and was on the road to my office before 9 a.m., new card activated and in my wallet.
I’ve never been able to pinpoint fraud on my accounts to any particular physical location or data breach. If I were aware of the possibility my card had been compromised, I would, of course, report it to my bank. But it seems I only hear about it after the fact.
Recent reports have claimed that financial institutions are more reactive than proactive when it comes to fraud, responding to breaches and compromised customer information rather than combating it. As both a consumer and as part of a news organization that reports on the financial industry, I believe that while that may be a true statement, it is an unfair one.
Fraud prevention requires a partnership between retailers, consumers and financial institutions – and even then, the hackers will probably always be one step ahead. And when fraud occurs, as it inevitably does, financial institutions bear the bulk of costs – informing customers that their accounts may be compromised, issuing new cards, fraud monitoring and covering the charges that do get through. (Though that might change soon, as banks are rightfully beginning to push back against large retailers caught in breaches.)
Data breaches and financial fraud have become a part of modern life. The best defense may a good offense, but a good defense can’t be discounted – and neither can the care taken of a customer after they have been sacked.
Email: cmurphy@thewarrengroup.com
