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Fake Flags on Your Account

Don’t count on caller ID to protect you.

It’s an old credit card con in which you inadvertently help scammers use your plastic to make fraudulent charges. And it’s back.

In recent months, police across the country have issued new warnings about this scam involving phony fraud investigators, which first surfaced about six years ago. It works something like this:

A “fraud investigator,” typically pretending to be from Visa, MasterCard or American Express, calls and gives you a fake name and badge number. The investigator claims that your card has been flagged because of an unusual purchase and asks you to verify making it. When you say you didn’t make the charge, you’re told that the money will be credited to your account and that the company will launch a fraud investigation.

But first, the caller claims, you need to verify that you still have your card—by providing the three-digit security number on the back of a Visa or MasterCard. (On American Express cards, it’s a four-digit number on the front).

Getting this security code is the point of this scam, since it’s needed to make credit card purchases by telephone or online. With it, scammers can make bogus charges on your account until you notice them when you get your monthly statement.

This scam first came to light years ago because of a widely distributed e-mail warning about it. By many accounts, the extent of the ruse was exaggerated. Still, officials say it is a plausible scheme—and making a comeback—primarily because these phony phone calls appear legitimate, for a couple of reasons:

Your caller ID may indicate the incoming call is, indeed, coming from your credit card company. Because of “spoofing” products readily available on the Internet, fraudsters can display any corporate name and telephone number they choose on a recipient’s caller ID.


The “fraud investigator” may already have your name, address and credit card number. A sleazy store cashier or waitress could have gotten your name and card number from a previous legitimate purchase you made, and a quick search at an online telephone directory such as can provide your address and phone number. Meanwhile, more sophisticated scammers get this information by breaking into merchant websites, using it for themselves or selling it to others. (In some scams, you might be asked to provide all the personal information as part of the caller’s fraud investigation.)


• The bottom line: Don’t take the bait. Credit card issuers won’t ask for your three-digit security code—or other information—because they already have it.

“Our Investigative Services division has recently worked many, many credit card scams of a similar disposition,” says Robin Beal of the Ardmore, Okla., police department. “If someone calls your house and tries to get you to disclose credit card information numbers for any reason, don’t do it. Hang up on them, and then contact the company directly at their listed telephone number.” You can get the real phone number by looking on your statements or the back of your card.

This advice applies not only to phone calls that allegedly come from your credit card company, but also to those purporting to be from your bank or other institutions.

If you think you may have already fallen victim to this type of scam, immediately contact your local police, as well as the financial institution. Again, be sure to look up the telephone number yourself. provides more information on the fake flagging of credit card accounts.

Sid Kirchheimer is the author of "Scam-Proof Your Life" (AARP Books/Sterling).


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