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This story appears in the February 2009 issue of Cards&Payments.
Late last year, the editors and staffs of the magazines in SourceMedia's Banking group, including Cards&Payments, put together 2009 predictions for the industries we cover.
Included in the our prediction for the payments industry was an expectation that credit card issuers will pull back on the number of cards they issue and the amount of credit they offer in response to rising delinquencies and charge-offs.
But what I also should have noted was how fraud, too, will play a bigger role in how issuers operate as the economy weakens. Perhaps if what happened to me last month had occurred earlier, I would not have been remiss in excluding it in the prediction.
On Jan. 13, I called the Chicago Cubs ticket office to renew my season tickets for this year. The total due was $3,380 (the Cubs owed me money back after that dismal playoff performance last season). I gave the clerk my credit card information, and she said she would process the transaction later in the day.
About 10 minutes later, she called back to say the card was rejected. I knew I hadn't exceeded my credit limit, so I called JPMorgan Chase, my card issuer, to find out why.
An automated system read off three recent card transactions, including the one attempted for my tickets, and asked if any were not legitimate. Once I indicated none were, the voice prompt said to try the charge again and it would go through. I did so, and it did.
I later spoke with a director in the Cubs ticket office to see if he was seeing more card rejections this year because more issuers are tightening their credit. He said rejections hadn't gone up. Instead, he suggested Chase blocked the transaction as a protection against potential fraudulent activity.
Turns out he was right. A representative in Chase's card department said Chase blocked the transaction because the amount was unusually high. "It put a red flag to the fraud department. They just wanted to make sure it was you," she said. "With the economy the way it is and fraud on the rampage," Chase just wanted to make sure it wasn't someone who had gotten my card information through phishing or other fraudulent means.
With tightening credit at the forefront of trends affecting the industry, it would be wise not to forget that the trend of rising fraud hasn't gone away.
Like most Cubs fans, I guess, I have a short memory when it comes to losing.
Jeffrey Green, Editor-in-Chief
