Fraudulent Transactions: How American Express Saved My Day

Fraud prevention button, concept about cybersecurity, credit card and identity protection against cyberattack and online thieves

I’ve been using credit cards for about 6 years now and I’ve never faced a fraudulent activity on my card until a day back, when someone was trying to do series of charges all of a sudden on my American express platinum Travel card. There were three fraudulent charges attempted on the credit card, let’s see one by one

American Express Fraud Prevention in Action – The full story:

Charge #1
One fine afternoon, i got a message from American Express that a charge of $1 was made on iTunes. I was wondering what’s happening because I haven’t added this card to my iTunes a/c and i was sure about it.

Fact: This transaction is more like a test charge by the “smart” guy to check if the txn is going through. Yes it passed.

Charge #2
While I’m still thinking how the past charge happened, another charge $16 happened somewhere else. But American Express security systems caught it this time and denied it. Amex also sent me an alert message & email.

Now I understood what’s happening. So I called up phone banking to block the card.

Charge #3
As soon as I mentioned the scenario to the Customer Care Rep., she understood the nature of issue and quickly connected me to security team. While this is happening, I got a message and I was sure what I’m gonna see.

Now another $5 charge was initiated on the card and this went through, maybe because it’s a very small amount. I mentioned this as well on call and just after few verification my card was blocked and replacement request taken.

I was also assured that these charges won’t be billed to my ac.
Peace. Of. Mind. !!

Total call time: ~3 Mins

How does this work?

On digging more on how it works, I was said:

“American Express will dispute the txn with the merchant with the given information and fraud prevention intelligence data. Even if merchant proves/wins the case, we’ll absorb the loss for you”

That’s so nice isn’t it?!

Credit Card Chargeback and Disputes with other banks:

While this is the first kind of “fraudulent charge” I’ve ever faced, I have disputed couple of transactions in the past with other card issuers when I don’t get the service/product that I ordered.

That was more of a dispute on txn done by me, though it also works in similar way.

And I know how painful it is to do the dispute process with card issuers. For ex, with ICICI, once you raise the dispute, you need to download the dispute form and send the filled form with all details of the txn: why-what-how.

Only then the case will be considered and will be taken up for review that will take another ~60 days for final decision. You’ll get interim credit so you won’t be billed. Almost all banks work this way.

The most important thing with other bank cards is we’re not fully covered. We may win or loose the case. If we loose, we got to pay for it.

Now this is where American Express wins. The whole process is fast and smooth and you can be 99.99% sure that you’ll get the money back. American Express is known for this feature worldwide and this is the exact reason why I use Amex on foreign websites.

How to Prevent such fraudulent charges in future?

#1 Credit card cloning/reading is becoming very common. For ex, I had a quick meet up with one of our blog reader “SriKrishna” and he showed me how his android phone can read his contact-less card just with a tap. All the card details are now visible on his app, except CVV.

Moral: Your contactless cards are NOT secure!

Anyone can fetch your card details just by tapping on your wallet. FYI, some foreign payment gateways can charge your card even without your CVV number.

#2 Transacting Online: No matter how secure a website maybe, your card has every probability to get compromised one day or other. I believe my case falls in this category. I’ve used my Amex card in couple of websites and it seems somewhere the data leaked out.

I knew this would happen some day or other to me and so i purposely use Amex cards on new/less popular websites, knowing that i’m gonna loose a bit on Markup charges of Amex over other cards i have. However, i use only in places where the charges are small and when i feel paying few hundreds extra is okay for a peace of mind.

When the charges are high, i always prefer my other low markup free cards and charge through PayPal wherever possible as its one of the most secure platform for foreign payments.

Pro Tip: Replace your card every year if you use them a lot.

Bottom Line:

American Express has one of the most friendly guys around when it comes to fraud prevention, handling disputes & card replacement anywhere in the world. This is possible because American Express deals directly with merchants as they themselves act as a card issuer/card network/bank, etc.

It seems many others experience the same as well when it comes to Amex as you could see one of the tweet here:

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