It’s time to fire the Stanford Federal Credit Union

The reason why I am firing them is their Visa Card, and the fact that it is incredibly unreliable outside of the State of California. The good news is that after spending over an hour on the phone with the SFCU and companies working for them, I now understand why. And as a result I would not recommend anyone who does a significant amount of travel to bank with the Stanford Federal Credit Union at this time.

The event that triggered this post was me picking up my rental car when arriving in Europe. A very friendly representative told me that unfortunately my visa card was declined when trying to charge a $700 deposit on the account. That was odd. The card usually operates as a debit card (with either signature or pin based transactions) and the account had well over $10k on the account. It was also odd as I had used the same card at the same agency 9 months before without problems.

I called SFCU Cardholder Services and a less friendly representative told me that the reason was that $700 was above my transaction limit. The limit could only be changed by the SFCU customer representatives, and they would not be in the office before Monday 9am. As it was Friday night, this meant 48+ hours without a car. We eventually booked the car with Isabelle’s card two hours later.

About 12 hours later I received a voice mail from the SFCU that my card had been flagged for a suspicious transaction, and that unless I call them back, it would be blocked. I called the SFCU Cardholder Services again, and spoke to a representative who identified himself as “Alton” working in Tampa Florida. According to him, the initial transaction was not blocked because of the transaction limit, but because it was flagged as fraudulent. This made more sense. He was not able to explain why his colleague 12 hours earlier had told me something different.

I asked him if he had indication why it was flagged. He said that their default policy is to initially block any transactions outside your home state. It is declined, but can be be authorized if they contact me successfully which should happen in a matter of hours. The only exception is if the travel has been registered in their system in advance. Essentially this means unless you pre-register your travel, the SFCU Visa Card will not work reliably outside of California.

Alton connected me to Patt who identified herself as working for PSCU in St. Petersburg, Florida. Her job was verifying transactions, and what she said mostly matched with what Alton had told me.

I appreciate that the SFCU wants to manage fraud, but initially declining any transaction that is out-of-state essentially makes their Visa Card unusable for traveling. Given the the diverse and international Stanford community, this seems especially out of place.

This is also not the first time this has happened. Over the past years the SFCU has blocked transactions or threatened to block the card due to incorrect fraud alerts about half a dozen times. And I am not the only person having this problem (see this Yelp review). One remedy that the SFCU has suggested is to pre-register any out of state travel with them. This for me is not only impractical due to the amount I travel, but also due to stop-overs and route changes. I had my card flagged once for purchasing food at Denver Airport while changing planes.

The actual analysis and flagging seems to be done by Fair Isaac’s Falcon Fraud Manager. From the SFCU’s original email when introducing this service dated November 3rd, 2006:

To enhance security on your Stanford FCU QUAD and ATM cards, we have launched the Falcon Fraud Manager, which is a state-of-the-art system for detecting card. Unusual or suspicious transactions are those that do not fall under your pattern of debit card usage. For example, if you have not conducted debit card transactions in Germany within the last two months, and a transaction is conducted in Germany with your debit card number, this would be considered a suspicious transaction. The transaction would be blocked, and a Falcon Representative would attempt to contact you.

If the representative is unable to reach you within 24 hours or you are unable to reach the representative at 1-800-871-9159, your card will be permanently blocked and you will receive a new card.

Emphasis mine. So if you fly to India from SFO (which can easily take 24 hours door to door) and don’t have a chance to call them back, they would permanently block your card. They may since have changed this policy, on their web site it now says “your card MAY be temporarily blocked until we validate the activity with you.”. I am not sure I would take the chance.

I think at its core, the SFCU has a customer relationship problem. For me, their cards are their most important product. They have outsourced the important parts of this product (customer service, fraud detection) to a external company. I have spent a lot more time with representatives of their outsourcing partner that with the SFCU themselves. The SFCU staff may be friendly and competent, but I would not even know that. If you outsource your primary customer touchpoint, you have to manage that touchpoint very carefully or pay the consquences.

I asked the SFCU for comment on this post and will update if I hear from them.

And in the mean time, does anyone have a good suggestion for a card that works internationally?

Update: Lisa Uribe from the SFCU called me and said that they could register me as someone who travels frequently and that should reduce the number of times transactions get flagged for fraud. I had asked the SFCU previously if something like this could be done and at that time customer service representative (who was not Lisa) did not know of such an option. Lisa was very competent on the phone. Again it seems that SFCU staff is a lot better than the card services staff. However when I had trouble with my card, I usually did not end up talking to SFCU staff.

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7 Responses to “It’s time to fire the Stanford Federal Credit Union”

  1. Sasha Says:

    I personally use my HSBC card, as there are now branches in most major US Cities and it is a worldwide bank (mostly Asia and Europe though). But I found out that on December 3rd, alot of rates changed, its been posted profusely. Check it out here. But alos, don’t give up on Stanford FCU, they are still better than a bank and I’m sure that if you’re patient, they can remove the block and help. They’re still better than a bank!

  2. Guido Appenzeller Says:

    Sasha: The international fee issue is one I am looking at as well. Well Fargo would probably be my 1st choice for a bank. I had a chance to work with them professionally and they really impressed me. However their fee structure for international use is amongst the highest.

    Another great resource on international fees is the Flyerguide Wiki’s page on Credit/Debit/ATM card usage abroad.

  3. Guido Appenzeller Says:

    Scott Loftesness weighs in via Twitter to suggest using a credit card (instead of a debit card). At a first glance there seems little difference as they are both signature based transactions on the Visa network. However as fee structure and trasnaction type are different, it could well be that fraud detection is tuned very differently.

  4. Sebastian Linnert Says:

    I used the American Airlines Gold Credit card for most of my travel to Europe. I have a Patelco Credit Union Card with a 500 US $ limit. I use that only to buy gas. I also have Master Card fom Citibank connected to my American Airlines account. this one works mostly well too.

  5. Guido Appenzeller’s Blog » Blog Archive » Are banks training their users to be Phished? Says:

    [...] Europe this year,  the badly tuned Falcon Fraud Manager triggered for both of our payment cards again. It blocked Isabelle’s card and sent out an alert for mine. This itself is bad enough, but [...]

  6. Emilie Says:

    So here I am twiddling my thumbs for 2 days in Panama City, whittling time away til 9am opening hours so I can by a plane ticket.

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