Fraud detection

Hopefully you have never received a call from your bank or your credit card issuer asking if you just purchased an expensive item from someplace that you have never been. If you have (and you weren’t the one doing the purchasing) then it probably means someone has stolen your identity. It’s not a pleasant feeling at all.
Your credit card issuer probably knows more about you than you do. They are tracking your usage and look at irregularities. Chances are you are not looking at your statement and if you are, you’re probably not doing it every day, much less multiple times a day. Your credit card company is always monitoring. That means, if you live in Virginia and all of a sudden a charge shows up purchasing gas in Oregon, something may be amiss; or if you usually just use your card for purchases under $100 and all of a sudden a $3,000 handbag gets charged, that will raise some eyebrows.
Credit card fraud is a huge issue in this country and it costs credit card issuers billions of dollars. They have as much interest in stopping someone from fraudulently using your information as you do. Automation handles the checking of transactions and flags anything that is deemed out of the ordinary for a human to review. This may lead to a customer being contacted and asked about their recent purchase. Verified fraudulent activity on a credit card can lead to swift deactivation of the card and prevention of further loss. Retailers who have been caught making fraudulent charges are also flagged for examination when customers make purchases from them.
There are downsides to this. The customer could be on their first international vacation and that could explain why charges are all of a sudden popping up in Europe or wherever else around the world. Not realizing this, the card issuer may not been able to get a hold of the customer and shuts down the card, leaving the poor traveler in a world of hurt. I ran into a similar scenario during recent travels, out of my normal geographic area. I had paid for everything on my trip with cash until I needed gas outside of a small town in Alabama. After filling up and getting back on the Interstate my bank called, asking if I had just gassed up in Alabama (900 miles from home). I confirmed the authenticity of my purchase and all was fine.
Putting a stop to this is part of what the new EMV cards are trying to do. A thief can’t duplicate the card with only the information on the surface of the card. The chip produces a unique transaction code meaning the electronic information is only valid for that transaction. Thieves can still clone the cards without the chips though, and the chip does nothing to prevent online fraud. There are still plenty of avenues a credit card thief can pursue. That is why your credit card issuer must remain vigilant.