Warning: How criminals steal your banking info over the phone

Criminals are impersonating bank employees and getting customers to hand over their debit and credit card security codes, according to TV station KION.

Police in Carmel, California, are reportedly warning residents about this scam, but the message — and steps on how to stay safe — is relevant to everyone.

Report: New bank scam targets phone users with bank accounts

The scam works like this: A crook calls your phone pretending to be an employee from your bank.

What makes it more believable is that the phone number appears to be from your financial institution because of a technology called caller ID spoofing.

The thief typically tells you that your account has been compromised in some way, KION reports. To fix the issue, the crooks ask for the three-digit code on the back of your credit card.

Do don’t it: That three-digit code, known as a CVV (card verification value) or CVC (card verification code) is an anti-fraud measure.

Those numbers are part of the verification process that merchants need to go through to charge a transaction to your card.

In the event that you do happen to get a phone call from your bank, here are two things you should make sure of:

• Make sure they address you by your full name. They may have the wrong person.
• Make sure they identify themselves at the outset. You need to always know who you’re talking to.

Bank scam: What to do if you get a call

Don’t give out your personal info: The main thing you need to know about dealing with phone calls from a bank is to never divulge any information: Banks don’t ask for personal information over the phone.

Hang up the phone: If someone from a financial institution (or anyone really) asks for your personal information, hang up immediately.

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File a complaint: Visit the Federal Trade Commission’s Consumer Complaint Center at consumercomplaints.fcc.gov  or call them at call 1-877-FTC-HELP.

Here are 3 things your bank will never do

If you receive calls from time to time from financial institutions, you should always feel confident in who you’re dealing with.

Here are some red flags that will let you know that you’re dealing with a scammer on the other line:

• They ask for your full Social Security number, bank account or credit card number.
• They ask you to send sensitive bank information via email
• They ask you to go to a third-party site to enter your personal information

Here’s what money expert Clark Howard says about this scam: “Understand this: No one is ever going to call you from your bank or credit union in possession of your credit or debit card number and ask you for either your four-digit PIN or your three- or four-digit code from the card.”

Clark says here’s the #1 way to stay safe from this bank scam:

“You never, ever NOT EVER give someone pretending to be from a bank or credit union that information because that unlocks their ability to pretend to be you and have a field day buying as if they are you.”

Listen to Clark Howard talk about this phone scam

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Can freezing your credit hurt your credit score?

Anyone who follows money expert Clark Howard knows that his number one suggestion for keeping your finances safe from criminals is to freeze your credit.

A credit freeze, which is also sometimes called a security freeze, is a way of locking down your credit reports, which makes it nearly impossible for criminals to open new accounts in your name. This is because most creditors need to look at those reports in order to make the decision whether to extend you credit or not.

We here at Team Clark know that thousands of you have already frozen your credit or are considering it, in part because of all of the questions we get from people related to credit freezes. Chief among those questions is: “Can freezing my credit hurt my credit score?”

Does freezing your credit hurt your credit score?

Freezing your credit has no direct impact on your credit score. It certainly will not lower it. Indirectly, freezing your credit can actually help improve your credit score (or at least keep it from dropping) because it prevents unwanted credit lines from being opened in your name.

A credit freeze also does not “freeze” your credit score where it is. It will continue to rise and fall depending on how responsible you are with your credit.

What a credit freeze won’t do

There are some other important things that freezing your credit won’t have any affect on, according to the Federal Trade Commission:

• Freezing your credit won’t prevent you from getting your free annual credit report
• It won’t prevent you from opening new accounts yourself, applying for a job, renting an apartment, or getting insurance. However, to do any of these things you’ll need to temporarily lift the freeze and place it again when you’re finished accessing your credit. This is all free to do.
• Freezing a credit won’t stop criminals from accessing your existing accounts, so you’ll need to continue to keep a close eye on your statements for fraudulent activity.
• It won’t automatically stop you from getting pre-screened credit offers. If you’d like to opt out of those, see our guide here.

Final thought

When it comes to freezing your credit, there really isn’t any downside — and it certainly won’t impact your credit score.

Even lifting the freeze when you need to access your credit and freezing it again takes mere minutes — which is certainly worth it for the peace of mind you’ll having knowing that you’re protected from criminals who could ruin your financial life.

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