What It Is:
A warning bulletin is a list of credit cards that are reported stolen, canceled or compromised in some way.
How It Works/Example:
For example, let's assume that John's wallet is stolen. He calls Visa to report the theft, and the company places his number on its warning bulletin -- an electronic list maintained by Visa.
Later that day, a $5,000 transaction at Nordstrom appears on the credit card. The sales associate retains the card because the point-of-sale (POS) terminal quickly matches the card number to the number Visa placed on its warning bulletin. The sales associate then follows company policy regarding such situations -- this might include retaining the card and calling the police.
Why It Matters:
Credit card fraud costs businesses and individuals billions of dollars a year -- at least $8.6 billion, 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 warning bulletin is one such method.