Most fraud on lost or stolen cards takes place in retail outlets before the cardholder has reported the loss.
Fraudsters can still use a card reported as missing if the transaction amount is less than the retailer’s floor limit (a figure agreed between the retailer and its acquiring bank above which authorisation must be obtained). To avoid this, an electronic ‘hot card file’ is available to retailers which identifies cards reported as lost or stolen.
Retailers can subscribe to the Industry Hot Card File (IHCF) so when a transaction involving a UK-issued card is processed, it is automatically checked against the file and an alert is given of the card’s details should it match one of those on the file.
The banking industry actively encourages extensive use of the IHCF both at home but also abroad, where it helps to combat cross-border fraud.
Further details on the IHCF can be obtained from your acquirer.