July 2015 Issue Posted July 20, 2015
Every credit and debit card has a three- or four-digit printed security code for added protection from criminals charging without card present charges. But when criminals have stolen card account numbers – they work on tricking card holders into revealing the codes.
Here’s how the scam works: The consumer may not know their card has been compromised and receives a phone call from someone who claims to work at the card issuer’s fraud-prevention department. The caller reads the credit card number to the consumer and says that suspicious transactions have been identified on the account. The caller than asks to confirm a particular purchase. When the consumer states they did not make the purchase, the caller tells them not to worry because a new account number will be issued and they will not be responsible for any fraudulent charges. But first the consumer must provide the security code on the account to prove they are in possession of the card. If the consumer is hesitant in giving out the code, the caller lets the consumer know they may be responsible for some of the fraudulent charges.
Most consumers will fall victim to this scam because the caller already knows the card number.
What your customers can do to prevent this scam: If a caller claims to be from the card issuer’s fraud-prevention department, the consumer should ask for the caller’s name and/or employee ID, hang up, then call the 800-number on the back of their card and ask to speak with the fraud-prevention department or that particular employee. If the caller was not from the card issuer, explain that your account number most likely has been stolen. The card issuer can cancel the stolen account number and issue a new number.
Every bank should let their card holder customers know about this possible scam and what to do to protect themselves. This proactive policy can save the bank from fraudulent risk and loss.
Source: Curtis Arnold, CardRatings.com