Ever wondered what the difference is between using your credit card over the phone versus in person or online? When you use your credit card to make purchases by phone, some things work just as they do when you hand your card over. But there are also some major distinctions.
Verbal authorizations of credit card purchases by phone are declining as more remote transactions move online, Steve Kenneally, vice president of the American Bankers Association’s Center for Payments and Cybersecurity Policy, said. However, telephone credit card transactions have the same consumer protections as when you use your credit card in person or online, he said. The Fair Credit Billing Act of 1974 limits cardholders’ liability to $50 in the case of fraudulent transactions, yet nearly all card issuers waive this requirement by offering a zero liability policy.
Any merchant gathering card data must comply with stringent data security standards, just like other types of transactions. In fact, telephone transactions pose a bigger security risk to merchants than shoppers because this is an easy way for criminals to use stolen credit card information without presenting the card.
When making telephone transactions, shoppers should be aware of the fact that they don’t have anything in writing to confirm the nature of the purchase or its amount. When shopping in person, cardholders can view a readout on the register or get a copy of their receipt. And when shopping online, the purchase is put in writing. But when agreeing to a telephone transaction, both parties must make clear the nature of the goods or services being sold, as well as the exact amount of the total charge. The merchant must then provide a receipt, either online, in the mail or with the goods delivered.
Tips for Paying by Phone
When calling a merchant to make a payment, there are some steps you should take to ensure the transaction goes smoothly. First, listen carefully to the description of the sale to check what you’re getting. Unlike in person, you don’t have the goods in hand, and unlike online, you can’t see a picture before confirming the purchase.
When purchasing airline tickets or other travel reservations, take the time to have the merchant read back all of the reservation dates and times, and ask him to confirm the total amount of the charge, including any separate telephone booking fees, which are charged by many airlines. It’s also vital to double-check that your name is spelled correctly.
Next, go online and double-check the amount of the charge to confirm it was processed. With most airlines, for instance, you can receive a refund for any ticket purchased within 24 hours. Notably, American Airlines does not offer such a policy and complies with regulations by offering free 24-hour ticket holds.
Finally, don’t broadcast your credit card information in public, as criminals may overhear. Instead, try not to make charges by phone until you have a little bit of privacy. You should monitor your credit card statements regularly for fraudulent charges. If you have reason to believe your personal information has been compromised, you may want to check your credit for signs your identity has been stolen. You can pull your credit reports for free each year at AnnualCreditReport.com and see your credit scores for free each month on Credit.com.
Paying by Phone in Person
Making a payment over the phone is a practice that dates back to the popular mail order catalogs that preceded Internet shopping. Today, people are more likely to use their smartphones to authorize purchases at retailers than to spend time reciting their credit card information over the phone. New technology such as Apple Pay, Samsung Pay and LoopPay promises wireless transactions using stored credit card data. These transactions can be convenient for shoppers, but you need to be sure that your phone has some charge left before you go to the store. Thankfully, you can still use your mobile phone to make payments, even when you can’t get voice or data service.
More on Credit Cards:
- Credit.com’s Expert Credit Card Shopping Tips
- How to Get a Credit Card With Bad Credit
- An Expert Guide to Credit Cards With Rewards
Image: Creatas
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