Your Credit Card Security Code is the Key to FraudSubmitted by Breakwater Financial, LLC on June 9th, 2016
Credit card fraud is on the rise. Millions are hit with it each year, so most credit card users are more vigilant than ever, which is a good thing, except for when they fall for a fraud investigation fraud. Think about it, you’re now conditioned to watch over your carefully watch over your credit cards and react promptly if any signs of fraud pop up. And, when you receive a call from someone telling you that your card has probably been used fraudulently, you’re ready to spring into action. Thinking you have your protector on the other line, you may actually be talking to the person who is about to commit a fraud using your credit card. Here’s how it works:
You get a call one night from the security and fraud investigation division of VISA. The caller identifies himself, provides an identification number and then proceeds to tell you that your card with numbers ending with 4723 has been flagged for fraudulent activities. He has your full attention and then asks you if you made a recent purchase on your Chase issued VISA card for $297. You rack your brain for a brief moment to confirm for yourself that you did not, and tell the caller “absolutely not”. The caller reassures you that he will get right to work to reverse the charges and initiate a fraud investigation. He gives you an 800 number and a reference number to call if you have any questions, and asks that your review your next statement to verify the credit reversal. You are overcome with relief.
He tells you that, in order to process the reversal, he needs to verify that you are in possession of your card. So, you are asked to read the numbers on the back of the card including the three digit security code. You provide him with the information and he thanks you for verifying that the card is in your possession. He reassures you again that they are on the case, and repeats the 800 number and reference number to use in case you have any questions, and then bids you good night. You smile with gratitude. It may not be until you actually get your next statement that you see the new $297 charge made the evening of the call and learn you’ve been scammed.
Both VISA and MasterCard have confirmed that this scam is alive and working well for thieves all across the country. In fact, for as long as these card issuers have included the CVC2 or CVV2 three-digit codes on the back of the card, the scam has been victimizing unsuspecting cardholders. The security codes were added as safeguards to protect cardholders from identity thieves who may have obtained their credit card and other personal information. With most vendors, credit card purchases made online or over the phone require the security code verification in order to complete the transaction, otherwise, anyone who manages to lift your credit card number could use your card all day long.
Who Needs to Know Your Security Code?
If you were going to take the ultimate precaution, the only person you would provide your security code to should be someone whom you can verify as an official representative of the bank or financial institution that actually issued your card. Never, ever give your code to someone who claims to be a representative of VISA or MasterCard. Only the issuing financial institution will initiate a fraud investigation. Typically, fraud investigators won’t ask you for your security code. They will simply ask you if you are in possession of your card.
How about online purchases? Most online credit card transactions require your security code. If you know for certain that you are dealing with a legitimate business you need to double check that the website is secure with data encryption. You can determine that fairly easily by looking at the web address bar. If the web address is preceded by https://, the site is using secure encryption. It would also be important to conduct online transactions with well known businesses, such as Amazon.com.
The other type of transaction that may require your code is with a take-out order. When you place an order for pizza using your credit card, the vendor probably can’t complete the transaction without your security code. It’s not a good idea to entrust your credit card number and security code to anyone over the phone. You can give them your credit card number, but, instead of providing your code, you can let them know that you will have your credit card with you when you pick up the order. They can verify that you are the cardholder in person.
Never write your security code down on paper, and, of course, always keep your credit card in your possession.
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