Get Early Alerts to Financial Fraud

Credit- and debit-card fraud is a multibillion-dollar problem. To help you keep tabs on your accounts and thwart the bad guys, the major credit-card issuers, including American Express, Bank of America, Capital One, Chase, Citibank and Discover, offer a number of fraud and account-activity alerts that you can receive by text message or e-mail. To sign up, just go online to your card issuer's Web site and select the alerts you would like to receive.

A survey by Javelin Survey & Research in 2009 showed that few customers had signed up to receive alerts from credit-card issuers, although many said that they thought the alerts could help mitigate fraud. That's partly because the bank's alert may be delayed anywhere from a few hours to as long as 48 hours after a suspicious transaction has occurred. But now Visa has solved the timeliness issue with Rapid Alerts, which are delivered almost in real time. (MasterCard expects to make its version, inControl, available in the U.S. later this year.)

Wells Fargo is the first U.S. bank to offer the new Visa alerts. They're sent from VisaNet, Visa's processing network, within seconds of a transaction. Cardholders may elect to be notified when a transaction exceeds a specified amount, occurs overseas, is made online or by phone, or is declined. You may also check to see whether an ATM withdrawal is made using your Visa card. Wells Fargo is not charging for the service, but your cell-phone provider may charge you if you exceed your allotment of text messages. Some credit unions will soon offer near real-time alerts as well. (South Carolina Federal Credit Union is currently testing them.)

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Some banks are also providing more timely information about your checking account's status. For example, Mercantile Bank of Michigan has created Funds Manager, which not only offers crucial information but also provides it early enough for you to take preventive action. Customers who check their accounts online between 11 a.m. and noon see a list of checks that will clear that day. If you are about to overdraw the account, you may deposit cash by 5 p.m. or transfer funds by 7 p.m. and avoid a $30 overdraft fee. The service costs $4 a month.

The Bank of Stockton, in northern California, is offering real-time overdraft alerts warning customers that they might be overdrawn by the end of the day. For $5 per transfer, account holders can transfer funds in $20 increments by texting a code back to the bank. Moving funds via online banking or ATM is free.