(MONEY Magazine) – "Hello," says the caller. "My name is James Smart, and I'm from the Security and Fraud Department at Visa. Your card has been flagged for an unusual purchase pattern. Did you purchase an anti-telemarketing device for $497.99 from a company in Arizona?" "No," you answer without hesitation. "Then we will issue you a credit," the caller says. "To verify that you're in possession of your card, please read off the last three numbers that appear on the back." You're happy to oblige. The caller gives you a control number, encourages you to telephone with any questions and hangs up. He never asks for your card number--he asks for very little--so the word "fraud" doesn't enter your mind. That is, until you get your statement and find it filled with charges you don't recognize.

Where'd you go wrong? Giving away those three little numbers on your signature strip. They are your unique "card verification value," and a con artist who already has your card number can use them to convince online and phone merchants that he actually has your card and hasn't just ripped off your number.

Officials at Visa and MasterCard are well aware of the scam, which seems to have blossomed this past spring. The giveaway, says Visa, is that a caller is asking you for personal data. If you ever get such a request, take a breath, explain that you don't discuss your credit card over the phone and say you'll call back. If the caller is legit, he'll understand. Then dial the 800 number on your card to see if his story checks out. --JOAN CAPLIN