Friday, January 10, 2020

Credit Card False Positives

It’s disconcerting when we find fraudulent charges on our credit cards.  A different type of problem is a “false positive,” which is when a legitimate charge is denied.  After having my credit card denied when trying to check into a hotel, I wished credit card companies would do more to help customers recover from these false positives.

It was my Tangerine credit card that wouldn’t allow the hotel charge.  Tangerine certainly could have done more to prevent this problem and to make it easier for me to recover from it.

I alerted Tangerine to the dates I’d be traveling and the country I’d be visiting.  I certainly could have given more detail, but all they wanted was “USA.” With more detail, maybe they could have seen that the hotel charge was legitimate.

The bigger problem was their response as I tried to fix the situation.  I called Tangerine customer service, but there was no option for “you denied a legitimate purchase.”  The closest I found was an option to update my travel plans over the phone.

Once I got a human on the phone and explained the problem, I was promptly forwarded to some sort of security center that had a canned message for office hours that didn’t include Saturday night, and then it hung up on me.  Nice. I guess that “customer service” agent gets credit for keeping the call with me short.

After a second try with Tangerine customer service, I got someone who was able to “clear my card.”  This seemed to solve the problem the next time I used the card, but through all this nonsense, I had checked into the hotel with a different credit card.  This story would have been much worse if I didn’t have a second card, or it hadn’t worked either, and I hadn’t lucked out with the second agent who bothered to help me. 

False positives must be a concern for credit card companies.  So, why don’t they do more to help customers recover from them?  When I call the phone number on my credit card, why isn’t there a prominent option for “you denied my change and I want to fix it”?  Even better would be if there was a way to do this online. Are other credit card companies more helpful than Tangerine at recovering from a denied charge?

12 comments:

  1. I guess it depends on the FI. Desjardins immediately sends a text to your phone when you get a transaction declined, and you just have to text back yes or no if it was legitimate or not. If you text back yes you can try again in 5 minutes and it works. It's all automated.

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    1. @Anonymous: Desjardins' system for recovering from a false positive sounds much better than Tangerine's.

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  2. As Anonymous said, it does depend on the CC company. (Seems Tangerine lives up to its no-frills market niche).

    I'm with HSBC, which is pretty dinosaurish in terms of tech so doesn't do like Desjardins, but is focused on international travellers and so my false positive rate with them is much less than with my previous (RBC) credit card. But they do have a 24/7 call centre, and take just a few minutes to recover from a false positive (the only issue being extensive, somewhat meaningful but somewhat security-theaterish verification of your identity). I have noticed my false positive rate when I travel is no different whether I tell them my concrete travel plans, but I don't know if that's global tuning of their algorithm or if it is picking up on my own frequent travel patterns with some sort of Bayesian approach.

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    1. @Martin: The way FIs deal with false positives covers a wide range. Based on the very small sample so far, Tangerine appears to be at the wrong end of the range.

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  3. I always carry at least 2 cards and make sure one is a MC and the other Visa. Had a situation once when the entire Visa system went down for a few hours.

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    1. @Anonymous: That's a good idea. But it still makes sense to hold cards that make it easier to recover from a false positive. If your MC had a false positive while Visa's system was down, you would have been in trouble.

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  4. I use a Capital One card for everyday spending and used it to purchase advance train tickets from Dublin to Kilkenny. It was declined, even though I had informed them of the travel and had previously made similar purchases with the card without issue. Thankfully I wasn't trying to board the train, I was sitting in my living room when I bought them. It was a pain to find out why the charge was being denied and I ended up having to use another card.

    When we were overseas I used the Scotiabank Passport Visa, which doesn't charge the 2.5% FX markup. It worked out great. I'd get an email notification immediately after a purchase, which showed the charge in CAD. It also included a link to notify them if it was a fraudulent charge. No issues with it being declined at all during our trip.

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    1. @Robb: It sounds like Capital One didn't make it easy enough to fix the problem given you chose to use a different card. Given the way Scotiabank Passport Visa works, I wonder if they deny fewer charges on the expectation that they'll find out quickly if an allowed charge was fraudulent.

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  5. Once I got hit with a false positive on my RBC MasterCard in the US. A few minutes after the charge was denied I got a robocall on my mobile mentioning a 24/7 callback number. I called, they re-opened the card and made a note that further transactions from that location were legit. No further issues after that. I'm pretty satisfied how that went.

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    1. @Samson: Sounds like a good system to recover from a false positive. My Tangerine card remains at the bottom of the pile.

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  6. Hello Michael,
    I also have had issues with my Tangerine credit card. I have been unable to purchase CNE tickets online, get a cash advance in the amount I wanted (well within my limit) and book a reservation in the USA. In each case, I ended up having to use my CIBC Visa which worked without a hitch. You may wish to write to customer service at Tangerine and make a formal complaint, especially with respect to their lack of good phone support.
    Cheers,
    MG

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    1. MG: It sounds like you've had more trouble than I've had. I sometimes wonder if Scotiabank's goal is to try to transform Tangerine customers into more profitable Scotiabank customers. Whether or not this is true would have some bearing on whether complaining will do any good.

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