Kiwibank Credit Card Fraud Restrictions

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Forums › Finance and wealth management › Kiwibank Credit Card Fraud Restrictions

networkn

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#113116 7-Jan-2013 10:24

Hi There!

I had a very interesting (Read Frustrating) time over the holidays where our Platinum Kiwbank Credit Card which gets a LOT of use, was suspended with no notice because they noticed transactions they said were suspicious.

A couple of things of note.

1) It was a Amazon.co.uk transaction nearly identical to one made 3 days earlier (Box Set Blu-ray). 100% Legitimate
2) No-one Notified us. Initially was told it was because they were too busy. Second call, told it was automated.
3) When I called was told it was a temporary suspension and he would fix it and I could use the card immediately 3 Hours later, still not working and I was told it was not a temporary card hold but an automated block and wouldn't be available for 24 hours despite the fact it WAS NOT fraudulent activity.

Hopeless. How can a card be blocked for 24 hours with no way to unblock it in this day and age.

Not too impressed, does anyone know if other banks also can't "unlock" a card?

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#740889 7-Jan-2013 10:31

I used to work in Kiwibank fraud. They have a system which has rules set up that will block cards if certain transactions are made. Amazon, ebay and paypal are generally the culprits. A $1 transaction will be done to ensure a valid card then the full transaction will go through. Fraudsters do this as well, it triggers a rule that will automatically block the card.

The block can be removed, but due to system restrictions it takes 24 hours to clear.

Standard for all banks as far as I know and done to protect YOU.

networkn

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#740900 7-Jan-2013 10:37

Kopkiwi: I used to work in Kiwibank fraud. They have a system which has rules set up that will block cards if certain transactions are made. Amazon, ebay and paypal are generally the culprits. A $1 transaction will be done to ensure a valid card then the full transaction will go through. Fraudsters do this as well, it triggers a rule that will automatically block the card.

The block can be removed, but due to system restrictions it takes 24 hours to clear.

Standard for all banks as far as I know and done to protect YOU.

Well there was no $1 transaction, and considering how much I spend with Ebay and Amazon seems insane to block based on that.

Also whilst I understand it's done to protect me, I've never had another bank take 24 hours to clear a block before. Seems stupid that if the customer says the transactions were legitimate, that the card shouldn't be available for immediate use.

freitasm

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#740910 7-Jan-2013 10:44

They should have checks for trends. If the OP has frequent, legit, Amazon transactions then an alert shouldn't be raised.

Also I never had a $1 transaction from Amazon to check for card validity. This is the kind of thing Vodafone NZ does on every credit card payment, even for those cards already in the system, but never seen on Amazon.

Kopkiwi

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#740918 7-Jan-2013 10:46

Whoa not sure what happened there.

The $1 transaction is automatic from the website. Not you.

The block length is dependent on what sort of block is it. There is a range of codes which will determined if it can be unblocked immediately, or if there is a delay.

In this case because it was online, the block has a 24 hour wait.

freitasm

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#740921 7-Jan-2013 10:47

Yes, I know how the $1 transaction thing works.

networkn

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#740923 7-Jan-2013 10:50

I understand how the $1 thing works too. What I don't understand is why the system isn't able to be overridden? If I had been overseas, as I frequently am, I would have been in semi serious trouble, as this is our main CC and whilst we do have other cards with reasonable limits, 90% of our spending goes across this card.

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#740947 7-Jan-2013 11:39

Kopkiwi: I used to work in Kiwibank fraud. They have a system which has rules set up that will block cards if certain transactions are made. Amazon, ebay and paypal are generally the culprits. A $1 transaction will be done to ensure a valid card then the full transaction will go through. Fraudsters do this as well, it triggers a rule that will automatically block the card.

The block can be removed, but due to system restrictions it takes 24 hours to clear.

Standard for all banks as far as I know

This seems broken, if not outright stupid. I have a card that helpfully shows all pre-auths, and Amazon among a huge number of others all authorize between $1 and the total purchase price to validate the card then the final transaction. This is typically done in case of out-of-stock merchandise, shipping price changes, etc since Amazon in particular has a policy to only charge you for merchandise as it is dispatched.

This is also extremely common for other automated but non-online transactions such as pay-at-the-pump fuel pumps as well. Keying off a $1 authorization (vs. a $1 purchase) followed by an actual purchase from the same retailer is incredibly foolish and I think I'd fire any bank which did that*.

Kopkiwi: and done to protect YOU.

Absolute hokum. This is done to protect the issuing bank, and not the cardholder. The cardholder's liability is already limited/protected. It inconveniences the cardholder something epic.

* Which I have done recently. iTunes transactions for $25 are not fraud and stopping that card while I was at the airport grabbing another TV series to watch on the plane was beyond infuriating. Card canceled, relationship manager informed and is now grovelling suitably.

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Kyanar

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#740948 7-Jan-2013 11:39

I know with Westpac, whenever they block a transaction on me, they can override it on the fly as soon as their (not automated) CSRs call me to confirm it's legit. I find it hard to believe that Kiwibank cannot override their blocks in real-time. It's certainly not a standard at all.

And for what it's worth, any merchant using a $1 authorisation to validate a card is doing it wrong. The correct way is to post a $0 charge to the card (which has been possible for about 3 years now as a validation methodology - $0.01 and $1 auths can actually get you a "misuse of authorisation" fine now).

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#740949 7-Jan-2013 11:44

Don't shoot the messenger. Simply provided a reason for it. If it was manually blocked then it would have been unblocked with immediate effect. Because it was system blocked, there is a 24 hour wait.

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#740952 7-Jan-2013 11:45

PenultimateHop: iTunes transactions for $25 are not fraud

I got a "card declined" message from Apple, followed within seconds by a call from Westpac asking whether it was legitimate. It really makes me wonder how some of these rules work; I've made dozens of purchases from iTunes so why did it decide to flag that particular one?

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#740954 7-Jan-2013 11:48

Behodar:
PenultimateHop: iTunes transactions for $25 are not fraud

I got a "card declined" message from Apple, followed within seconds by a call from Westpac asking whether it was legitimate. It really makes me wonder how some of these rules work; I've made dozens of purchases from iTunes so why did it decide to flag that particular one?

There are a number of places that fruadsters use to test if a card is active. iTunes is one of them. If you haven't used iTunes, eBay, Amazon etc in a while the system will most likely flag it. Different banks will have different rules in their system. As to why some purchases are flagged and not others for the same place, I couldn't say.

Technofreak

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#740984 7-Jan-2013 12:06

Kopkiwi: I used to work in Kiwibank fraud. They have a system which has rules set up that will block cards if certain transactions are made. Amazon, ebay and paypal are generally the culprits. A $1 transaction will be done to ensure a valid card then the full transaction will go through. Fraudsters do this as well, it triggers a rule that will automatically block the card.

The block can be removed, but due to system restrictions it takes 24 hours to clear.

Standard for all banks as far as I know and done to protect YOU.

Not so sure about being done to protect the card holder as banks reimburse for fraudulent activities, more about protecting the BANK I would say.

Oops, I took a while getting my reply done, in the meantime PenultimateHop beat me too it.

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surfisup1000

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#741212 7-Jan-2013 18:55

PenultimateHop:
Absolute hokum. This is done to protect the issuing bank, and not the cardholder. The cardholder's liability is already limited/protected. It inconveniences the cardholder something epic.

Where do you think the money to cover fraud comes from? You know it comes out of your pocket right?

It is in all of our interests to protect against fraud.

Kyanar

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#741311 7-Jan-2013 22:08

Technofreak:
Kopkiwi: I used to work in Kiwibank fraud. They have a system which has rules set up that will block cards if certain transactions are made. Amazon, ebay and paypal are generally the culprits. A $1 transaction will be done to ensure a valid card then the full transaction will go through. Fraudsters do this as well, it triggers a rule that will automatically block the card.

The block can be removed, but due to system restrictions it takes 24 hours to clear.

Standard for all banks as far as I know and done to protect YOU.

Not so sure about being done to protect the card holder as banks reimburse for fraudulent activities, more about protecting the BANK I would say.

Oops, I took a while getting my reply done, in the meantime PenultimateHop beat me too it.

Wrong again. The MERCHANT is the one that gets held liable for all fraudulent transactions - banks get off scot-free. Why do you think adoption of 3DS is so damn slow? Because as soon as a merchant attempts 3DS validation, then the bank becomes liable for fraudulent transactions.

groynk

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#741453 8-Jan-2013 10:21

Kyanar:

Wrong again. The MERCHANT is the one that gets held liable for all fraudulent transactions - banks get off scot-free. Why do you think adoption of 3DS is so damn slow? Because as soon as a merchant attempts 3DS validation, then the bank becomes liable for fraudulent transactions.

I think it's slow because of tablet and phone games, plus not much marketing from Nintendo in this country.
Didn't know it could check for fraud though, could be used as a selling point

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