The scam has emerged in Florida, where Attorney General Ashley Moody has issued a consumer alert, but there’s no reason to believe it isn’t also occurring in other states.
Here’s how it works: a criminal installs a “skimmer,” usually on a gas pump, to steal credit or debit card information -- everything but the CV2 security code on the back of the card. To get the code, the scammer or an accomplice uses spoofing technology to call the cardholder and poses as someone from the bank or credit card company that issued the card.
The caller tells the victim that their account has been compromised -- which is actually true -- but the CV2 security code is needed to freeze the account. If the victim provides that missing information, the scammer then has an active card that can be used to make purchases, withdraw money, or sell on the black market.
“This scam incorporates some of the worst uses of modern technology to drain victims’ bank accounts and ruin their credit,” Moody said. “Floridians must arm themselves with the latest information and take steps to avoid these fraudsters to protect their hard-earned money.”
Red flag
The use of spoofing technology perhaps makes this scam a little more likely to fool a victim because the caller ID might show American Express or Bank of America is calling. But if consumers remember one thing, they will recognize the scam for what it is.
When a real financial institution identifies what it believes are suspicious and unauthorized charges on an account, it will text or email the account-holder and ask them to verify the purchases. If the account-holder says any of the charges are illegitimate, the old card will be immediately canceled and a new one will be issued.
The financial institution has no need to ask for the CV2 security code on the card because it already has that information. So if someone tells you they need the code to freeze the card, they’re running a scam.
How to stay safe
To guard against this scam, the first step is to prevent your account from being compromised through skimming. You can reduce your risk by taking these steps:
Pay with cash or a credit card with chip technology instead of a debit card;
Monitor transactions on financial accounts regularly to look for unauthorized charges;
Report unauthorized charges immediately;
Inspect card readers, especially at outdoor locations such as gas pumps and ATMs, to see if a skimming device is placed over the card reader or if the security seal is broken.
Also, never respond to a phone call from someone who claims to be from your credit card company. Instead, hang up and call the toll-free customer service number on the back of your card. That way you can be sure you’re really talking to someone from the financial institution and not an imposter who’s trying to steal your money.