and in the American version it's $497 instead of pounds.
Oddly enough it's one of those stories which is neither all hoax or all true - it's a mixture of both. VISA say that although this scam is possible they have only a limited number of reports of it actually happening. It's certainly not a widespread attempt at theft. Card issuers would obviously never ask for your card details over the phone, and I think that most people would know this. According to VISA there's definitely nothing to suggest that lots of people have been taken in.
As always with these stories, it's best not to mail them off to everyone on your address book - that's precisely what the people who start the rumours want you to do.