Key Insights in a Nutshell
- Transactions involving credit cards via phone or internet are identified as card-not-present (CNP) payments.
- These payment methods inherently carry a heightened potential for fraud against both buyers and sellers.
- Making credit card payments by phone remains reasonably secure when you follow proper safety measures.
Whether you’re arranging a new phone or internet connection and asked to put down a deposit, or purchasing from a business that doesn’t host an online payment portal, situations arise where you must share credit card info through a phone call.
Handing out sensitive credit card data during a phone conversation can trigger feelings of unease or even alarm. The danger lies in the possibility that your card number, expiration date, and other details might be jotted down on the recipient’s end—and then slip beyond your control. This uncertainty forms the heart of the problem.
Potential Hazards When Paying by Phone with Your Credit Card
Depending on circumstance, the risks linked to phone-based credit card payments might include:
- Your details could be exposed. Sharing your card details on a call ups the ante for fraudulent misuse. These details might be leaked online or fall into the hands of malicious actors aiming for identity theft, phishing scams, or worse.
- Security of your data may be uncertain. Even without malicious intent, you cannot guarantee how securely your card info is stored after the transaction. If kept improperly, your information could easily land with unauthorized parties.
- Unauthorized transactions may appear. Should your card information be compromised, fraudsters might rack up bogus purchases billed to your account.
Merchants’ Side of the Equation: The Risks They Face
While disclosing your card info by phone inherently involves risk for consumers, merchants accepting card-not-present payments carry their own vulnerabilities. A key concern is mistaking fraudsters for genuine cardholders during calls, which drives up merchants’ operational costs due to chargebacks and fraud prevention expenses.
| Your card’s expiration date |
| Your billing zip code |
| Your phone number |
| Sometimes, driver’s license details such as birth date and license number |
Why Do Some Businesses Still Roll the Dice?
Despite the inherent pitfalls that come with card-not-present payments, many companies persist in offering phone payment options—primarily because of the benefits involved. Some clients prefer interacting with a live person who can promptly answer queries, while others operate exclusively online, lacking a physical outlet. Additionally, businesses often allow bill payments over the phone to avoid chasing delinquent accounts later, when customers might no longer be able to pay.
Security Guidelines Governing Phone Credit Card Transactions
Unlike face-to-face or online purchases, phone payments involve direct interaction with a real person, which introduces unique security challenges. There’s always a chance that the agent handling the transaction may inadvertently or deliberately mishandle your data, or that a third party might intercept the call. Hence, it’s vital that such interactions occur over secure communication channels.
Enter the Payment Card Industry Security Standards Council (PCI SSC), which oversees the Payment Card Industry Data Security Standard (PCI DSS). This framework dictates how merchants should safeguard customers’ card information that they collect. Unless overridden by law, the standard forbids merchants from retaining full primary account numbers unless protected by strong security measures (like unreadable encryption). Other data—such as your name and card expiration—may be stored more freely.
Rules on Recording Phone Calls During Transactions
PCI DSS also sets rules about call recordings linked with card-not-present transactions. Merchants must not capture sensitive card information during recordings. If calls are recorded for service quality or compliance, recordings should be paused when sensitive data is exchanged. This precaution minimizes the risk of sensitive details falling into wrong hands.
If pausing the recording isn’t feasible, the merchant is obligated to erase the segment containing your card details once the transaction wraps up. If deletion isn’t possible, robust security protocols—such as advanced encryption and restricted access—must be in place to safeguard your data.
One Simple Trick To Avoid Recording Risks
Sometimes, merchants offer a safer alternative: letting you punch in your credit card number and expiration date directly on your phone keypad. This method can sidestep the problem of vocal data interception or recording during the call.
How to Shield Yourself When Paying Over the Phone
If you’re determined not to forgo phone orders entirely but want to keep your information safe, the following tactics can help:
- Verify the company’s legitimacy. Only hand over card data to businesses you trust. Research company profiles, browse customer reviews on platforms like the Better Business Bureau and Trustpilot, and steer clear of suspicious outfits.
- Never supply card details on unsolicited calls. Be wary of scam callers pretending to be legitimate merchants. Only provide card info when you initiated the contact.
- Opt for credit cards, not debit cards. Credit cards typically come with zero-liability fraud protection. This shields you from paying for fraudulent charges, unlike debit cards which offer weaker federal safeguards.
- Request payment confirmation. Before committing to a phone purchase, confirm the exact charge and save the transaction details and confirmation number for reference.
- Keep tabs on your accounts. Check your credit card statements frequently for suspicious activity and report anomalies immediately.
- Think about identity theft protection services. These services complement issuer alerts by monitoring your personal data for fraudulent signs, often providing insurance and help if identity theft strikes.
Did you know? Card-not-present transactions have soared alongside the growth in online and phone shopping. According to recent data, CNP payments currently represent over 60% of all e-commerce transactions globally, reflecting a massive shift in consumer behavior.
Stronger Protections for Credit Card Users
The good news is that credit cardholders enjoy better protection than ever before, thanks to zero-fraud-liability policies. This means when you spot and report unauthorized charges promptly, your issuer usually wipes those fraudulent expenses clean from your bill.
Federal regulations also offer greater safeguards for credit cards compared to debit cards. Under U.S. law, your maximum liability for unauthorized credit card charges is capped at $50, whereas debit card users risk losing much more if fraudulent activity is not reported swiftly.