Mobile and online credit card transactions have made over-the-phone payments somewhat rare. Still, there are instances where it might make sense for you to pay this way — when ordering takeout, for example, or paying a bill from a small-business owner.
But the level of risk with over-the-phone payments can be somewhat higher than when using your credit card online or in person, as remote transactions can make it difficult to verify a merchant’s identity.
Here's what to know to limit your susceptibility to fraud when making payments this way.
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What are the risks of over-the-phone credit card transactions?
Any credit card transaction is potentially vulnerable to fraud. But unlike payments made in person or even online, cardholders and vendors alike aren't necessarily able to verify whether the person at the other end of the line is, in fact, who they say they are.
When you make a transaction by phone, you're typically required to provide the vendor with sensitive information because your card can’t be swiped:
With remote transactions, it can be difficult to confirm that you're giving out such sensitive information to the intended merchant and not to a fraudster. And protections that could otherwise lessen this risk won't be of much use in an over-the-phone transaction.
A signature, photograph or encrypted card chip, for example, can't be physically verified in these types of scenarios. Even the CVV, or "card verification value," won't be a fail-safe.
If you find yourself a victim of fraud — whether from a transaction over the phone, in person or online — know that you're better protected when you use a credit card than you would be with a debit card.
That's because federal law limits consumers’ liability for credit card fraud to a maximum of $50, and most credit card issuers have $0 liability policies. So while the credit card issuer and/or the merchant may take a loss, it’s unlikely you'll be out any actual money, as you could be if your debit card were compromised.
But reporting the fraud to your issuer, freezing an existing card, ordering a new one and then changing all of your autopay accounts to an updated card number? Those are headaches you can do without. And there are ways to avoid them.
There are steps you can take to mitigate the risks of fraud from over-the-phone credit card transactions.
You call them, not the other way around. Never provide your credit card information to representatives who call you unexpectedly. Criminals can claim to be from your card issuer or bank and ask for your personal information. To this end, provide necessary card information only to merchants you've called directly. And before making any transactions, confirm that you've dialed the vendor’s correct phone number.
Double-check the charge before hanging up. When making purchases over the phone, you can't physically see the products you're buying. So after you’ve placed your order, ask the merchant to confirm what you’re being charged for and the exact amount of the transaction. You can also ask for an order confirmation number.
Monitor your account. Review your credit card statement often to check for any fraudulent or suspicious activity and to make sure your transactions are being charged correctly. You might even want to log in to your card account immediately after placing an order to ensure the correct charge appears as "pending."
Use your card's prevention tools. Take advantage of your card's additional security settings. Features like virtual card numbers and account alerts can help ward off fraud, and card lock can help if you find you've been victimized.
Never make a credit card payment over the phone if a company calls you unexpectedly. Scammers attempt to steal your personal information by calling you and posing as a legitimate business. Once you're ready to make a purchase, be sure that you call the company directly.
Credit card transactions that you make over the phone have the same protection as those you make online or in person at a store. The law limits cardholders' liability to $50 under the Fair Credit Billing Act (FCBA) for any unauthorized transactions on your account so you will want to make sure you report them.
Criminals can claim to be from your card issuer or bank and ask for your personal information. To this end, provide necessary card information only to merchants you've called directly. And before making any transactions, confirm that you've dialed the vendor's correct phone number.
Never make your card details shown in public. Never provide your cvv number when asked on the phone or when processing a card payment in person. This is a sure sign of an impending fraud! CVV numbers are for online purchases only!
Using a credit card to pay for recurring expenses like cell phone bills has its upsides. It's convenient, plus you can earn valuable points if you pay with a rewards card.
Require complete information: When accepting a credit card over the phone, key in the complete information, including the card number, expiration date, CVV code and the customer's full name as it appears on the card. Request the customer's phone number and complete billing and shipping addresses, including ZIP codes.
The client provides their card details over the phone, including the card number, expiration date, and CVV (Card Verification Value). The business then enters these details into a secure payment gateway or virtual terminal, a web-based portal the merchant services provider provides.
Don't provide your CVV when using your credit or debit card in person. Don't make payments over the phone with your credit card, unless you make the call directly and know it's a trusted vendor. Scammers have been known to cold-call victims to perpetrate financial fraud.
It's generally safer to use your bank's online bill pay because you have more control over the payment process. You set the amount and date of payment rather than allowing the service provider to take the money from your bank account on their terms.
This harmful software can steal sensitive data from your devices and share it with hackers. One common type of criminal software — called a keylogger — records everything you type. This includes credit card numbers, passwords, emails, and more, and sends them to the hacker.
The answer depends on a retailer's refund policy. Some retailers may only ask for your receipt to issue a credit card refund, while others may ask for you to provide additional information, like your credit card number and your CVV.
As a result, mobile payment information can be stolen. Mobile payment services are better off being used on private networks, on your carrier's cellular network, or on VPNs. Additionally, people are safer using their own wireless charger or phone batteries than using any public charging station.
Mortgages, rent and car loans typically can't be paid with a credit card. You may need to pay a convenience fee if you pay some bills, like utility bills, with a credit card. Using a credit card for your monthly bills can offer opportunities to earn rewards.
Typically, cellphone providers don't report your payments to the bureaus — though newer services like Experian Boost can help you manually add your cellphone account. Unfortunately, it's easier for your cellphone bill to negatively impact your credit because missed payments do get reported to the credit bureaus.
Phones do create a magnetic field, but thankfully, it isn't strong enough to demagnetize credit or debit cards. The small magnet in the phone's speaker is the main culprit of generatingthe magnetic field. This field, however, is too weak to cause sufficient damage to a credit card magnetic strip, with some exceptions.
Use reputable websites when shopping online. Don't provide your CVV when using your credit or debit card in person. Don't make payments over the phone with your credit card, unless you make the call directly and know it's a trusted vendor. Scammers have been known to cold-call victims to perpetrate financial fraud.
Introduction: My name is Dr. Pierre Goyette, I am a enchanting, powerful, jolly, rich, graceful, colorful, zany person who loves writing and wants to share my knowledge and understanding with you.
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