Declined and Blocked - A Brief History of Credit Card Fraud Prevention
The credit cards was invented primarily for allowing the consumer to have a hassle-free line of credit. However, the use of the credit has evolved from a simple once-in-a-while affair into something that is integral for most people's lives. With increased demant, credit card companies have sprouted everywhere. Due to an increased level of competition, credit card companies were forced to innovate by adding features to the financial instrument, and fraud protection was born.
Fraud protection gives credit card users peace of mind because they will not be required to pay for transactions which they do not authorize. With this, the popularity of credit cards surged even more, so that it is almost always expected that every person should have at least one of them.
However, this additional feature is a major financial risk for card companies and it is thus normal for them to find ways to avoid unnecessarily financial losses arising from credit card fraud. Every year, banks and other credit card companies collectivly lose hundreds of millions of dollars to credit card fraud, and that minimizing this loss is tantamount to the financial viability of these intitutions.
Hence, credit card companies thus started to hire more financial analysts, statisticians, and various other risk experts to come up with models that can prevent this unfortunate occurence. With the aid of a sophisticated network of special computers and customised in-house computer programs, today's credit card institutions can more effectively prevent credit card fraud by stopping then right before they happen.
All of these strategies boil down to pre-emptively blocking further use of the suspicious credit card until it has been confirmed that no fraud is present. Hence, it is essential for the user to let their credit card issuer know if they will be using the card for something that can be considered as out of the ordinary so that they can avoid extreme inconvenience
And thus, headaches were born.
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