You order a pizza for delivery. The teenager on the other end asks for your credit card number over the phone. The teenager then writes down your information and uses it to go on a spending spree. While it is generally safe to use your credit card over the phone, there are a few ways to mitigate the risk of fraud.
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As mentioned above, the person on the other end of the line (be it a pizza place or a travel agent) could theoretically write down your information and use it to commit credit card fraud. Or, someone listening to your phone conversation can overhear your information and use it themselves.
Unfortunately, this makes giving out your credit card number over the phone a fairly insecure way of paying for goods and services. You would probably be better off paying via a website, but sometimes there isn’t an option for that, especially with food deliveries.
The credit card industry, led by giants including Visa and MasterCard, enforce a security standard on retailers for collecting credit card information. Known as the Payment Card Industry Data Security Standard (PCI DSS), non-compliance can result in fines or loss of use of a lender’s card.
There is a document explaining how retailers and call centers can comply with the PCI DSS with over-the-phone transactions.
According to the PCI DSS, storage is not permitted for the full magnetic strip data (and given that the retailer won’t have access, this is a bit superfluous), the security code and PIN. They can store the cardholder name, service code, and expiration date, and the primary account number — the actual credit card number — but must render it unreadable if stored.
Mitigating Fraud Risk
There are a few actions you can take to reduce the risk of fraud from paying by credit card over the phone.
Check Your Order and Credit Statement
First, make sure you understand exactly what you are ordering. It could be a product or service, but you need to know the details. This speaks to the second part, understanding how much you will be charged. There could be hidden fees, service charges, or services you did not realize you were paying for. For hotels and airlines, there may be an additional charge for booking via telephone.
Once you are off the phone, go online and check your credit card statement to see exactly what is processing. Is it the correct amount, or have you been overcharged? This can also be useful for seeing if, in the days and weeks after you have made the purchase, someone is using your card.
Another good practice is to never give out your credit card number if you did not initiate the call. Phone numbers can be spoofed, meaning that caller-ID shows a different number than whoever is actually calling you, and the person could pose as someone from a retailer when they are merely trying to steal your credit card number.
The Imposter Scam
Finally, do not fall victim to the imposter scam and give out your credit card to someone claiming to be a family member who was detained overseas. They may claim they have a cold, which is why their voice sounds off, and are in jail for something embarrassing. They need money for bail, and ask you to either wire the money or give them your credit card number. Unsurprisingly, it’s not someone you are related to, it’s just a scammer.
There are security measures in place to protect you from fraud due to paying by credit card over the phone. However, it is still not as safe as paying online or in person, where you can stay in control of your credit card throughout the entire transaction. It is, however, about as safe as paying for food in a restaurant where the waiter takes your card. In both cases, the person can copy down the relevant information if they so choose. Because of this, it’s important to regularly check your credit card statements for abnormalities and immediately contact your lender if something out of the ordinary appears.
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