Protect Yourself Against Credit Card Fraud

Phishing, card skimming, and phone scams are a few examples of credit card fraud affecting Canadians. The best ways to protect yourself include keeping your PIN secure, using strong passwords, and diligently monitoring your credit card transactions and credit report.

This article explains what credit card fraud is, including the different types affecting Canadians. We also list actionable steps you can take to protect your card data both physically and online, and walk you through how to recover and prevent fraud from happening again.

What is credit card fraud?

According to the Canadian government, credit card fraud happens when someone uses your credit card information to make unauthorized purchases. Since there are many ways your credit card details can be accessed, it's important to understand how the information is/was stolen.

Phishing

Phishing is the practice of attempting to steal personal information, such as passwords or credit card numbers, or to get you to inadvertently install malicious software on your device. This software allows fraudsters to exploit and steal your personal information.

Phishing usually takes the form of emails or other online communications that appear to be from a reputable company or organization you would normally trust, such as your bank. You might get an email that looks legit, but when you click a link, open an attachment, or log in to your account, your information can be compromised.

Data breaches

A data breach occurs when someone, usually a hacker, gains access to sensitive personal information stored in an electronic database. Large organizations like banks and hospitals are often targeted, and, unfortunately, data breaches are becoming increasingly common as hackers use sophisticated technology to steal data.

If your personal information has been compromised in a data breach, the organization that was hacked is required to notify you.

Card skimming

Criminals sometimes attach card skimmer devices to legitimate card readers to steal card data from people who use them. One common location is gas station fuel pumps, where unsuspecting customers swipe or insert their cards to pay.

Card skimmers are also often placed on ATMs, especially in areas that are out of the way, dimly lit, or infrequently used. There's less chance that the skimmer will be detected in these types of locations.

Weak passwords

If you're still using the same password for every website you use, or using easy-to-guess personal information, you have weak passwords. These are very easy for hackers to guess

There are ways to avoid this, even if you don't want to come up with a new password by yourself every time. Computers and mobile devices will generate safe passwords for you, creating a string of random numbers, letters, and symbols that are much harder to guess.

Phone scams

It's common for scammers to call you and try to get personal information, especially with the increasingly-sophisticated AI tools available. These tools make it easy for phone scammers to convince you to part with your personal information or money.

For instance, a scammer may pose as a relative asking for financial help. They may even steal personal details to learn your kids' or grandkids' names and impersonate them.

Lost or stolen cards

If your credit cards are stolen, thieves use them to see what they can get before you report the card loss. It's very important to immediately contact your bank or financial institution if you can't use your cards.

How to protect yourself against credit card fraud

There are simple, proactive steps you can take, and basic mindset shifts that greatly reduce your risk for credit card fraud. And, the more layers of security you build, the more protected you'll be.

What to do if you're a victim of credit card fraud

Credit card fraud is unfortunately common, and if you become a victim, you should immediately alert your card issuer, contact the Anti-Fraud Centre, call the police, and continue monitoring your accounts.

It's important to take these steps as soon as possible:

Alert your credit card issuer: Your financial institution will freeze your credit card account to prevent anyone from making purchases with your card or taking cash advances. They'll also begin investigating and, if needed, send you a replacement credit card.

Put fraud alerts on your credit reports: Contact TransUnion and Equifax, the 2 major credit reporting bureaus, and ask them to place fraud alerts on your reports. This adds another layer of security so thieves can't easily get credit in your name. Alerts stay on your account for 6 years.

Contact the Canadian Anti-Fraud Centre and Canadian Centre for Cyber Security: The Canadian Anti-Fraud Centre collects information about fraud and identity theft. If you have been a victim of either of these things, you should report it to them. And if the credit card fraud was committed online, reach out to the Canadian Centre for Cyber Security using the email address or phone number listed on their contact page.

Report the fraud to local police: Even if the police can't help you immediately, reporting the incident and obtaining a file number for future reference can still be valuable. If any other fraudulent account activity occurs, be sure to contact the police again and have them add it to your file. This will help you regain control over your information and protect your credit score.

Continue to monitor your accounts: Be diligent about checking each of your financial accounts for suspicious activity or unauthorized transactions. You might prefer to purchase a credit monitoring subscription that monitors these accounts and alerts you if fraud is suspected.

FAQ

What is considered credit card fraud?

Any unauthorized use of your credit card or credit details to make purchases you didn't authorize is considered credit card fraud. It's important to contact your card issuer and financial institution immediately if you suspect you're the victim of fraud.

What is the most common credit card fraud?

According to Canada's Competition Bureau, the most commonly reported types of credit card fraud are identity fraud and service fraud. Aside from credit card fraud, other common types of fraud include investment, romance, job, and various service frauds, such as internet, cable, or phone services.

Do police investigate credit card theft in Canada?

Yes, when credit card fraud is reported to police stations, they create reports and track the crimes. Law enforcement uses the National Fraud Reporting System, managed by the Royal Canadian Mounted Police and the Canadian Anti-Fraud Centre, to track and investigate crimes across the country.

What does phishing mean?

Phishing is a strategy in which hackers send messages intended to extract personal information from you. For instance, you might be sent a legitimate-looking email with an attachment that has a virus that compromises your computer's security or a link that downloads malicious software when you click it.

How do I stop phishing emails?

Check that your email's spam filters are active and block specific email addresses if you keep getting phishing attempts from the same accounts. You can also report phishing attempts to the Canadian Centre for Cyber Security. Contact IT if you're getting phishing emails at your work account.

What are the most common online scams?

According to data from the Canadian Anti-Fraud Centre, the most recently reported online scams are investment and cryptocurrency fraud, identity fraud, phishing, and fund recovery fraud. Unfortunately, relationship- and romance-related fraud is also common and often involves AI chatbots.