Warning Bulletin

Key Takeaways

• The warning bulletin is a list of canceled, past due, and stolen cards, now available online.
• Merchants use the bulletin to verify a card's validity before accepting it.
• Visa and MasterCard issue the warning bulletin to combat credit card fraud.
• EMV chip cards also help to reduce fraud by generating unique transaction codes for each transaction.
• Information on magnetic stripe cards is static and can be duplicated by criminals.

What Is the Warning Bulletin?

The warning bulletin is issued by the two biggest credit card vendors, MasterCard and Visa, to alert merchants to canceled, past due, and stolen credit cards. The bulletin is available online and is updated in real time. Merchants are advised to obtain authorization from customers before accepting the cards listed and to use specific protocols when collecting cards that have been flagged for improper use.

Enhancing Fraud Prevention With the Warning Bulletin

The warning bulletin is also known as the cancellation bulletin, the hot card list, or the restricted card list. It is meant to deter credit fraud, which costs businesses and individuals billions of dollars per year. The sheer number of credit cards in the market and the massive number of transactions that occur every day means 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.

Visa and MasterCard require merchants and member banks to follow specific procedures and protocols when recovering and returning counterfeit cards, or cards that are not used by the authorized cardholder. Typically, the processor must follow several steps when returning a recovered card to the issuer. If the merchant has not already done so, the processor cuts the card in half through the magnetic stripe. After receiving the card along with any required documentation, the processor then forwards the recovered card to the issuer. Cards should be recovered, provided that can occur through safe and reasonable means.

Strengthening Card Security with EMV Technology

As warning bulletins have evolved over time, moving from a paper list to an online database capable of immediate updates, so have credit cards. 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 make sure data breaches do not occur. One of its major advantages is that it cannot be easily copied. Cards with magnetic stripes can be duplicated through a simple swipe of the card because the information contained on the strip is permanent, making it easier to copy and reuse. Conversely, chip cards create one-time codes unique to the specific transaction. All details of that transaction are stored in the one-time code. Thus, the information gathered would not be usable for subsequent purchases.