Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Hot List

What it is:

A hot list is a list of credit cards that are reported stolen, canceled or compromised in some way. 

How it works (Example):

A hot list is also called a "warning bulletin," "restricted card list" or "cancellation bulletin."

For example, let's assume that John's wallet is stolen. He calls MasterCard to report the theft, and the company places his number on its hot list -- an electronic list maintained by MasterCard and linked to all the merchants who accept MasterCard.

Later that day, a $5,000 transaction at Nordstrom appears on the credit card. The sales associate retains the card because the point-of-sale (POS) terminal quickly matches the card number to the number MasterCard placed on its warning bulletin. The sales associate then follows company policy regarding such situations -- this might include keeping the card and calling the police.

Why it Matters:

Credit card fraud costs businesses and individuals billions of dollars a year -- at least $8.6 billion, according to one study. Due to the sheer number of credit cards out there and the massive number of transactions that occur every day, credit card processors need a way to communicate lists of lost, stolen or compromised card numbers quickly and efficiently. The hot list is one such method.

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