SEATTLE (USA Today) -- If you've been embarrassed by having your payment card transaction inexplicably denied lately, you are not alone.
In survey results released on Monday to USA TODAY, authentication firm Finsphere found 27% of all U.S. card holders have experienced a false decline, while 48% are concerned with false declines.
Finsphere's survey of 1,200 adults, conducted by Penn Schoen Berland, found 82% of card holders who experienced a false decline felt the episode was inconvenient, embarrassing or irritating.
"Having your card declined when you've paid your bill and you have credit available is really perplexing for a lot of people," says Mike Buhrmann, CEO of Finsphere.
Meanwhile, the financial firms aren't happy about the high number of false declines, either. Banks and payment processors are losing lots money, not just to fraudsters, but also in missed opportunities for transactions fees.
The root cause: Cybercriminals have become expert at leveraging Internet communications and commerce to scale up payment card fraud.
"Declined transactions mean less money for the banks and inconvenience for the customer," says Gartner banking security analyst Avivah Litan. "The banks have gotten overzealous in protecting their accounts because there are so many stolen cards around."
Case in point: the cybergang that stole an estimated $45 million by attacking ATMs with hackers and a global ring of accomplices. Authorities arrested a handful of lower-level operatives, but the ringleaders got away.
The thieves very likely gained access into a payment card processing firm by targeting certain individuals for a spear-phishing attack, getting them to click on a tainted file or Web link. With a foothold on the company network, the crooks were able to locate and steal account logons and PINs, and also boost the ATM withdrawal limits on hundreds of accounts.
The account information was then embedded on blank mag stripe cards distributed to a small army of cash-out mules - recruits who then used the faked cards to withdraw thousands of dollars in cash from ATMs in several cities.
Security vendors like Finsphere, PhoneFactor, Entrust and others are helping U.S. banks with a variety of security systems to slow down such capers.
But the fundamental problem is one the U.S. banking and payment card industry owns: America stands alone in continuing to use magnetic stripe payment cards. All of Europe and Asia have progressed to chip-embedded payment cards, which are much more difficult to counterfeit.
"We have to get away from magnetic stripe cards, and until that happens it's just going to keep evolving like this, with more theft, more inconvenience and more cost," says Litan. "Until the U.S. moves to the chip, everybody else has to have a mag strip so that the card gets accepted it the U.S."