Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Restricted Card List

What it is:

A restricted card list is a list of credit cards that are reported stolen, canceled or compromised in some way.

How it works (Example):

A restricted card list is also called a "warning bulletin," "hot list" or "cancellation bulletin."

For example, let's assume that John's wallet is stolen. He calls MasterCard to report the theft, and the company places his number on its restricted card list. The restricted card list is disseminated to all the merchants who accept MasterCard.

Later that day, a $5,000 transaction at Nordstrom appears on John's credit card. Nordstrom's point-of-sale (POS) terminal quickly matches the card number to the one on MasterCard's restricted card list. The sales associate sees the red flag pop up, then follows company policy regarding such situations -- this might include keeping the card and calling the police.

Why it Matters:

Credit card fraud costs businesses and individuals at least $8.6 billion a year, according to one study. Due to the sheer number of credit cards out there and the massive number of transactions that occur every day, credit card processors need a way to communicate lists of lost, stolen or compromised card numbers quickly and efficiently. The restricted card list is one such method.