Beware of this Credit Card Scam

My wife runs the Neighbourhood Watch scheme for our road and received the following report last week.  Given the time of year and how plausible it sounds, I thought that it was worth publishing here.

The scam works like this -  Person calling says "This is (name) and I am calling from the security and fraud dept at VISA/MasterCard.  My badge number is 12460.  Your card has been flagged for an unusual purchase pattern and I am calling to verify.  This would be on your VISA/MasterCard which was issued by (name of bank) did you purchase an anti-telemarketing device for £497.99 from a marketing company based in London?  When you say No the caller continued with - "Then we will be issuing a credit to your account.  This is a company we have been watching and the charges range from £297 to £497, just under the £500 purchase pattern that flags most cards.  Before your next statement, the credit will be sent to (gives your address), is that correct?  You say yes.  The caller continues - "I will be starting a fraud investigation.  If you have any questions you should call the 0800 number listed on the back of your card and ask for Security.  You will need to refer to this Control Number.  The caller then gives you a 6 digit number "Do you need me to read it again?"
 
Here's the IMPORTANT part of how the scam works, the caller then says "I need to verify you are in possession of your card".  He will ask you to turn your card over and look for some numbers.  There are 7 numbers, the first 4 are part of your card number, the next 3 are the security numbers that verify you are the possessor of the card..  These are the numbers you sometimes use to make internet purchases to prove you have the card.  The caller will ask you to read the 3 numbers to him.  After you tell the caller the 3 numbers, he will say "That is correct - I just needed to verify that the card has not been lost or stolen and that you still have your card.  Do you have any other questions?"  After you say No the caller then thanks you and states "Don't hesitate to call back if you need to" and hangs up.  You actually say very little and they never ask for or tell you the card number.
 
What the scammers want is the 3 digit PIN number on the back of the card.  Don't give it to them.  Instead, tell them you will call VISA or MasterCard directly for verification of their conversation.  The real VISA MasterCard told us that they will never ask for anything on the card as they already know the information since they issued the card.  If you give the scammers your 3 digit PIN number you think you're receiving a credit.  However, by the time you get your statement you will see charges for purchases you didn't make.
 
 Basically NEVER divulge your PIN number or the 3 digit security code to anyone who calls you.   These codes are your secret codes and protect you against fraud.  When you initiate the transaction, or you are purchasing goods on line from a reputable site, you will be expected to use the code, and that is correct.  If in any doubt, terminate the call and contact your bank or card issuer.