"The bank takes even more aggressive steps to try and show you've done something wrong and that it is your malpractice," Keshek said. "You're almost guilty before proven innocent."

Banks can use other means to detect counterfeit cards. For example, if a card is used in Sydney and an hour later used to withdraw cash in Romania, it's a good sign a fraudster may be at work.

But geolocation blocks have their limits, particularly when a fraudulent transaction takes place near where a cardholder lives. "It's very difficult to catch these transactions because the fraud systems aren't tight enough," said Avivah Litan, a fraud detection expert and analyst at Gartner. "Otherwise, they start inconveniencing good customers."

Still, banks are developing better systems to catch fraud, Swaine said. The global financial system that enables card payments around the world is so technical, Wilson said, "It's amazing it ever works at all."