Published on Bing Travel on August 8, 2010
Sunday, August 08, 2010
It’s the worst kind of surprise. You’re traveling abroad, you head to an ATM for much-needed cash, and the machine rejects the transaction. Suddenly, you’re penniless far from home. Instead of enjoying your travels, you’re forced to waste valuable time untangling the mess.
Unfortunately, this scenario has become increasingly common. Here are the three most likely reasons this occurs and what you can do about them.
1) Fraud alerts
Unusual activity on a customer’s account, such as the request for a cash withdrawal in a foreign country, is what usually triggers these holds and keeps you from your hard-earned money.
In the last two years, a boom in ATM crime has forced banks to be proactive in protecting accounts. Crime has accelerated due to the widespread online sale of “scraping” devices that filch ATM users’ personal identification numbers. Foreign transactions, especially, raise red flags, though the reason may surprise you.
“It’s a federal crime to counterfeit plastic cards in the USA,” says Jasbir Anand, a senior consultant for ACI, an electronic payment consulting company. “But the penalties are much less harsh in many foreign countries. So though your card may be ‘scraped’ at an ATM or gas pump in America, the information will likely be sold in an international, online black market and then made into a fake card in one of the countries where the penalties aren’t as bad.”
Solution: Contact your bank before you leave home and let it know exactly where you’ll be and when. Do this not only for travels out of the country, but when you’ll be traveling a good distance within your home country. Software that tracks user habits has become so sensitive that even travel from state to state can occasionally set off alarm bells.
Problems with the solution: Alas, talking with a customer service representative about your travel plans does not guarantee a hassle-free trip. That employee most likely won’t have the ability to change the software that tracks your banking habits.
“Many of the systems that analyze transactions can’t input info on short-term changes,” says Paul Heninger, vice president of products for Nice Actimize, a financial crime-fighting firm. “So the bank employee will put an explanatory note on the system, pointing out that you’re traveling, but that won’t stop the software from blocking the transaction if it looks suspicious.”
What the note will do is send an alert to lift a hold, something that usually happens manually about an hour after the first alert comes in. Heninger notes, however, that the hourlong window likely won’t apply if your account is at a small bank. Many of these institutions don’t staff their fraud operations 24 hours a day or on weekends, meaning you may have a long wait before you’re reunited with your money.
A solution for the solution: Always bring the international phone number for your bank with you so you can call right away if there’s a problem. Not all banks print this number on the back of their cards, so be sure to get that information before you hit the road. Talking with your bank will also let you know whether the problem is with your account or whether the local bank machine you’re using is simply having mechanical difficulties. If that’s the case, simply move on to another ATM.
Heninger also recommends “behaving like a tourist” to avoid problems. “If you take money out at the airport ATM or use a credit card in a hotel, the system will assume you’re traveling,” he says. “But if you go downtown and try to take out 300 euros at three in the morning right off the bat, or buy jewelry or electronics with your debit card, you’re likely to get flagged.”
2) Withdrawal limits
All banks impose a limit on the amount you can withdraw in a day, and many lower that limit for foreign transactions. Exceed that daily amount and you’ll be turned down.
Solution: Ask your bank to raise your limits for your time abroad. Not all will, but requesting that concession is worth a try.
Also, keep track of what time it is at home. Kathy McCabe, a former business banking officer for Citibank, says travelers often get into trouble when they try to make too many transactions in a day, forgetting that although it may be Friday in the place they’re visiting, it’s still Thursday at their local bank, and their withdrawals are being counted towards Thursday’s total.
3) Accessing the wrong account
“People have multiple accounts, and in some countries there isn’t an option to pick checking or savings. The foreign ATM simply defaults to one account,” Anand says. “You may get stuck with an account that doesn’t have enough money in it.”
Solution: When you’re making that call to the bank to let it know you’ll be on the road, also ask what your “default account” is. Then check to make sure it has enough money in it. Some experts like Heninger suggest that travelers open a special account with money just for the trip. That way, if your ATM/debit card is lost or stolen, the thieves will have access to only a limited amount of cash. Anand disagrees with this advice, however, citing the high fees often incurred in opening an account. “From a fraud protection standpoint, they’ll have less data on you,” Anand said, “so you’re more likely to be turned down with a new account when you try to get money out.”
The bottom line: ATMs are convenient, they offer excellent exchange rates, and using them is usually problem-free. But since ATM snafus are on the rise, always carry some other form of money. I’m not suggesting you bring a lot of cash (a common mistake and the reason tourists are targeted by pickpockets). Consider instead traveling with a small amount of cash in the form of traveler’s checks in case of emergencies. Or get a prepaid credit card that’s MasterCard or Visa branded (and thus widely accepted), which can work like cash in restaurants and shops.
Pauline Frommer is the creator of the Pauline Frommer guidebooks. She also co-hosts "The Travel Show" with her father, Arthur Frommer, now heard on more than 100 radio stations nationwide.