Plastic security when you're abroad

04-02-2006

 

Two weeks ago, I wrote about foreign currency conversion fees charged by various banks for ATM transactions made abroad brought comments from a number of readers. While most agreed that the ability to access their cash from abroad is a convenience worth paying for, there were some issues.

For example, Randy York of Dormont said his 28-year-old daughter, Jennifer, who is studying in St. Petersburg, Russia, had been using her Citizens Bank ATM/debit card successfully for months to get money from her account at home. But last fall with no explanation, her card suddenly stopped working, giving only "invalid account" messages.

Since she couldn't reach the bank from abroad on the toll-free customer service line on the back of her card, she had to work through a conference call with her father and the bank to learn that her card "had security issues" and would have to be replaced.

During a Christmas visit home, she got a new card, but while trying to confirm that it would work back in St. Petersburg, she was informed that the bank had shut off all ATM transactions originating in Russia and Eastern Europe. Ms. York wound up buying enough travelers' checks to cover the rest of her stay in Russia, and even had to register with the local American Express office there to be able to cash them.

Ms. York had done nothing wrong, but apparently her account had been frozen as a precaution against the wave of fraudulent ATM/debit card activity that has followed in the wake of security breaches.

As reported in recent weeks, computer hackers have stolen PIN codes and used the information to access customer accounts and withdraw funds. From a thief's point of view, getting cash from an ATM machine is much better than using a stolen credit card to buy items that must then be fenced.

The consumer protections against credit fraud are different from debit fraud. While banks are not required to reimburse customer accounts for fraudulent ATM/debit card activity, many do, and accordingly they have become particularly vigilant about detecting these transactions as soon as possible. Banks use computers and staff to scan incoming transactions for unusual patterns and will suspend activity immediately if they detect something amiss.

Banks are particularly alert for foreign transactions, especially from certain countries with reputations for this kind of activity. When banks believe there may be fraud, they may shut down individual accounts, and in some cases, temporarily block all transaction activity from a particular country. Areas of Eastern Europe and Africa have seen problems, but so have England and Canada.

Unfortunately while consumers can take appropriate steps to safeguard their cards and PIN numbers, account security can be compromised. When an account is suspended for security reasons, banks and credit card companies try to notify the client by phone or mail, but a message may not reach travelers away from home. The first clue that something is amiss comes when they try to use the card. The second will be when strange purchases or withdrawals pop up on their statements.

Calling the issuer immediately to report the problem can minimize the damage. But what can a traveler do to minimize the potential for difficulties in the first place?

First, before you leave the country, call the toll-free customer service number on the back of your cards and report your travel plans, what countries you'll be visiting and the approximate dates. Ask if there are any regional security alerts that might affect you. Finally, get a regular phone number that you can call from abroad in the case of an emergency.

Second, never rely entirely on one form of plastic for payment. Ideally carry at least two credit cards and two ATM/debit cards issued by different institutions. Keep these spares in a secure place other than your purse or wallet. Take along a second form of photo ID in addition to your passport, as well as some backup cash or travelers checks.

Never respond to e-mail messages purportedly from a bank or financial institution advising that your card has been compromised and asking for confidential information such as account or Social Security number. Computer thieves also "phish" for victims that way. In these situations banks will call or send snail mail.

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