Fraud prevention

'Who the heck is SYTLEH*3H4029NH and why did I pay them $361.55?' Taking the mystery out of shoppers’ card statements

March 20, 2024 | By Christine Gibson

It’s probably happened to you. You open your banking app and see a $361.55 charge to SYTLEH*3H4029NH that you do not recall. And why would you spend $500 on a gaming platform when you can’t even master Candy Crush? 

So you dial up your bank’s call center and eventually discover that SYTLEH*3H4029NH is the online reseller from whom you bought a coat last month. And it turns out your son invested in enough virtual long swords and throwing stars to equip an army of digital goblins.  

As e-commerce flourishes, “first-party” or “friendly” fraud — when cardholders challenge genuine transactions — is growing along with it. Sometimes, the customer is intentionally trying to get credit for a transaction they authorized, regretting an impulse buy or hoping to get something for free. Often, though, the customer is making an honest mistake: The bill shows an unfamiliar payment provider or they simply forgot about the purchase.  

These latter cases are dubbed “transaction confusion,” and they are on the rise: A January 2024 Datos Insight survey showed that 50% of consumers questioned a purchase in the last 12 months, and 24% did so because they didn’t recognize the details on their statement. Investigating these legitimate transactions ends up racking up needless expenses for the bank and wasting consumer’s time. 

However, the right data can jog cardholder’s memory and head off unnecessary disputes.  

Half of consumers surveyed in January said they questioned a purchase they made in the last 12 months.

“Consumers are calling for more insight into their spending,” says Gaurav Mittal, executive vice president of Ethoca, a Mastercard company, which created Ethoca Consumer Clarity to deliver that information exactly when customers need it. “They’re asking for a record of exactly what they spent, who they spent it with, where, and when. Tools that provide clear purchase details present a valuable opportunity to give them what they want — a transparent and simplified payment experience.”

Did I buy that?

When you open your statement at the end of the month, you see a list of merchant IDs, which may bear no relation to the names of the businesses you visited.

The problem is compounded by the fact that, in addition to the explosive growth of e-commerce, much of in-person shopping is now digital. For instance, you used a mobile payment app to buy an egg sandwich at a farmer’s market stall called Down the Hatch, and now you’re baffled by a charge to Mike Smith, who turns out to be the proprietor.

At the same time, as we store our payment information on a growing array of connected devices, from voice-activated speakers to video streaming services, it’s increasingly likely that others who share the devices, like family members, may make payments without necessarily alerting the person who pays the bills.  

All of this confusion can undermine people’s trust in the digital economy.

“We’ve all been there,” says Ron Secrist, head of client experience for Citi U.S. Personal Banking. “It’s frustrating and anxiety-provoking to see a seemingly mysterious charge on your statement or in your online transactions. At Citi, we’re constantly evaluating ways to create a seamless experience for our customers from the point of sale to their monthly statements. Products like Consumer Clarity save customers’ time in a phone call to customer service and develops a confidence in their credit card issuer.” 

For 50% of customers, the first course of action is to call their bank. This in itself raises operational expenses, as each live service interaction costs companies more than $7 on average. And call centers may not have access to information that could clear up the confusion. For cardholders already uneasy about mysterious charges, hanging up the phone without a resolution can be exasperating.

In these cases, many customers request a payment called a chargeback from their banks, which can be a lengthy process. And the damages add up: The formal dispute process costs $8.5 billion in the US alone in 2022, and experts expect that number to climb to more than $12.8 billion by 2026.  

Solving the mystery with data 

But these chargebacks — and the frustration they provoke — could be avoided if the customer simply recognized the merchant’s name on their transaction statement. To spark these recollections, Consumer Clarity provides clear purchase details, such as a breakdown of each purchase, located in the banking apps consumers use to review their transaction history. 

Ethoca works directly with certain merchants to pull that data, which issuers can then use to augment online statements. When cardholders click on a transaction in the banking app or the website, a clear merchant name will be displayed along with an itemized receipt — showing how many virtual throwing stars your kid bought. By offering this information upfront, Consumer Clarity reduces customer service calls, allowing representatives to concentrate on legitimate errors and fraud cases.  

“We are using Consumer Clarity to help ensure online transactions are clear, understood, and have the needed information for the customer to understand their purchase,” Secrist says. “Adding a receipt is a perfect memory jogger, and we're already seeing a reduced number of customer service calls from customers that engage with these receipts.” 

Consumers are also happier. “If you can offer people useful information and more control, they'll stay with you longer,” Mittal says. “It's costly to lose customers and it's costly to get new ones. It's better just to keep them engaged, providing them much greater insight and control over their finances. This will ultimately help us create more trust, transparency and a more seamless experience for consumers.” 

Christine Gibson, contributor