Essentially, the scam works like this: the scammer identifies himself as an agent with the Security and Fraud Department of Visa (or MasterCard). He tells the card holder that his account has been flagged due to unusual activity. The scammer sounds very legitimate, even referencing his badge number and instructing the card holder to phone the toll-free number on the back of the card if he or she has any questions. The
scammer usually already knows the credit card number and issuing bank. He asks whether the card holder made a particular purchase for a certain amount. The card holder says no. After confirming the account holder’s address, the fraudster then gets to the real crux of the scam. He explains that he needs to verify that the card has not been lost or stolen and asks the card holder to provide the 3-digit security code on the back of the card. If the card holder gives out that information, the scammer now has what he needs to make on-line purchases with the credit card in question. Sure enough, it is only subsequent to the phone call that card holders will discover fraudulent activity on their card.
If you receive such a call,
DO NOT give out your security code. Instead, tell the caller you will contact Visa or MasterCard directly.
Remember that credit card companies will never ask you to provide your 3-digit code because they already have that information (
Snopes report on this scam).
If you discover fraudulent activity on your credit card account:
- contact your credit card company to report the fraudulent charges,
- cancel your card and request a replacement card,
- file a police report, and
- contact one of the three major credit reporting agencies to put a fraud alert on your account.
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