What is the Warning Bulletin?
The warning bulletin is a list of canceled, past due, or stolen credit cards. Created by the two biggest credit card vendors, MasterCard and Visa, the list was originally issued weekly in paper format but is now available online and updated in real-time. These vendors instruct merchants to obtain authorization before accepting the cards listed and engage in specific protocols when dealing with cards flagged for improper use.
Understanding the Warning Bulletin
The warning bulletin, also known as the cancellation bulletin, the hot card list, or the restricted card list, is a critical tool in the fight against credit card fraud. Credit fraud costs businesses and individuals billions of dollars per year. Given the vast number of credit cards on the market and the immense volume of daily transactions, credit card processors need an efficient way to communicate lists of lost, stolen, or compromised card numbers. The warning bulletin is one such method.
Visa and MasterCard require merchants and member banks to follow specific procedures when managing counterfeit cards or those not used by the authorized cardholder. Processors typically must undertake several steps when returning a recovered card to the issuer. If not already done by the merchant, the processor cuts the card in half through the magnetic stripe. Once received with required documentation, the processor forwards the recovered card to the issuer. Recovery of such cards should occur as long as it can be done safely and reasonably.
Preventing Credit Card Fraud
As warning bulletins have evolved from paper lists to online databases with real-time updates, so have credit card technologies. In particular, embedded computer chips, known as EMVs, are replacing the once ubiquitous magnetic stripes. The EMV format has become the global standard for card use at both ATMs and for point-of-sale purchases.
The main purpose of chip cards is to reduce credit card fraud and prevent data breaches. One of the major advantages of chip cards is their resistance to being copied. Cards with magnetic stripes can be duplicated through a simple swipe because the information on the strip is permanent, making it easier to copy and reuse. In contrast, chip cards generate one-time codes unique to each transaction. All details of the transaction are stored in this one-time code, making the information gathered unusable for subsequent purchases.
Related Terms: cancellation bulletin, hot card list, restricted card list, credit fraud
