What’s the punishment for credit card fraud?

Even minor credit card fraud can get you in big trouble.

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Credit card fraud is a broad term that covers any crime involving a payment card. Usually, the goal of credit card fraud is to get access to someone else’s funds, but it can sometimes involve identity theft as well.

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Credit card fraud

Credit card fraud can mean a range of things, but in essence it’s stealing someone’s credit card to access their funds and/or identity. But even if no funds are taken, stealing a physical credit card or the card’s information is punishable by law. And if the card is actually used, the punishment for fraud is more severe. The highest form of credit card fraud peaks with credit card forgery and identity theft.

The Criminal Code of Canada says that the umbrella of credit card fraud includes:

  • Theft
  • Forgery
  • Falsification
  • Wrongful possession of other people’s credit cards with intent to commit fraud.
  • The usage of equipment or software designed to steal credit card information (such as the PIN number)

According to section 342(1) of the Criminal Code of Canada:

Every one who steals a credit card, forges or falsifies a credit card, uses or traffics in a credit card or a forged or falsified credit card, or uses a revoked or cancelled credit card is guilty of an indictable offence and is liable to imprisonment or punishable on a summary conviction.

What is the punishment for credit card fraud?

The punishment depends on the specific kind of offense and the amount that was defrauded. It can range from a 6 month jail term and/or a $5,000 fine to up to 10 years in prison. A person who is convicted of credit card fraud will also earn a criminal record which will limit their ability to travel, get a job, and potentially ruin their personal and professional reputation.

What are the chances of getting caught using a stolen credit card?

Unlike paying with cash, credit card purchases are easily traceable because they leave a digital footprint. To avoid that, fraudsters use freight forwarders or shipping mules to disguise their address if ordering online. Another frequently used method is called triangulation.

Triangulation is a process where the fraudster opens up multiple eBay accounts and sells legitimate items they don’t actually possess. When person A buys the item and deposits the money to the fraudster’s PayPal account, the fraudster orders the same item from another seller using the stolen credit card and has it shipped to the person A’s address. This way the fraudster gets off with the money while person A receives an item bought with a stolen credit card.

These methods only lower the chances of getting caught, but they can still be tracked.

Do police investigate credit card theft?

Calling the police and filing a report is among the first things you should do when you discover credit card theft. This can result in a police investigation, but only if it’s a serious crime. Sometimes, the police may not get involved and claim that this is an issue you should resolve with your credit card company. In general, credit card fraud can be investigated federally, by the RCMP and CSIS.

How to report credit card fraud

If you’ve been the victim of credit card fraud, you should contact your local police to file a complaint and also contact the Canadian Anti-Fraud Centre which is the central Canadian agency that collects information on economic crime.

Compare credit cards with fraud protection

Some credit cards come with a variety of fraud protection features, such as the option to freeze and unfreeze your card, chip-and-pin protection that increases counterfeit difficulty or zero liability for unauthorized purchases. Compare your options below.

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Benefits with this card Description
American Express Cobalt Card
Earn 5 Membership Rewards points per $1 spent at eligible grocery stores, restaurants, bars, cafés and food delivery services, and earn 2 Membership Rewards points per $1 spent at eligible gas stations, and on transit and travel purchases, and earn 1 Membership Rewards point per $1 spent elsewhere. Terms apply
Earn up to 40,000 Membership Rewards points. In the first year, earn 2,500 Membership Rewards points for each billing period when you charge at least $500 in eligible purchases to your card (for a total earn of up to 30,000 Membership Rewards). Plus, earn up to 10,000 Membership Rewards points when you spend a total of $3,000 in purchases in your first three months
BMO World Elite Mastercard
$0 annual fee for the first year ($150 thereafter)
Get 3 BMO Rewards points per $1 spent on eligible travel, dining and entertainment purchases (up to $50,000 spend annually), and get 2 BMO Rewards points per $1 spent on all other eligible purchases (and once you reach the $50,000 annual spend).
Earn a bonus of up to 35,000 BMO Rewards points with a minimum spend of $3,000 on eligible purchases in the first three months of card membership ($250 travel value to be used towards a flight booked through bmorewards.com). Plus, get the $150 annual fee waived in the first year.
HSBC +Rewards™ Mastercard®
$0 annual fee for the first year ($25 thereafter)
Earn 2 Points for every $1 spent on eligible dining or entertainment purchases.
Earn 10,000 Points ($50 travel value). Plus, get a full annual fee rebate for the Primary Cardholder for the first year. Apply by June 29, 2020. This offer is only available to residents of Canada other than the province of Quebec. Conditions apply.
HSBC World Elite® Mastercard®
$0 annual fee for the first year ($149 thereafter)
Earn 3% in travel rewards on all eligible travel purchases (6 Points per $1 spent) and earn 1.5% in travel rewards on all other eligible purchases (3 Points per $1 spent).
Earn up to 60,000 Points ($300 travel value). Plus, get a full annual fee rebate for the Primary Cardholder for the first year. Apply by June 29, 2020. This offer is only available to residents of Canada other than the province of Quebec. Conditions apply.
BMO Preferred Rate Mastercard
Take advantage of an introductory balance transfer offer, annual fee waiver in the first year, and low purchase and cash advance interest rates.
Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.

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Bottom line

Credit card fraud is punishable by law. Even if you steal the card and never use it, you can still be on the hook and pay a fine. But the severity of the punishment depends on the specific crime and amount that was stolen.

To protect yourself against credit card fraud, be sure to compare credit cards with fraud protection.

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