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How to identify credit card fraud, traps and scams

What to do if you're a victim of credit card fraud and how to avoid it.

Credit card fraud in Canada stirs financial anxiety in many individuals. According to a survey by CPA Canada, 86% of respondents reported that they were aware of credit card fraud in 2019 and nearly 39% refused to use their credit card with certain vendors for fear of credit card fraud. In this guide, we’ll explore how to identify and avoid credit card fraud.

What is credit card fraud?

Credit card fraud occurs when an individual obtains someone’s credit card information and uses that information to make an unauthorized purchase. To commit credit card fraud, the individual does not need to steal the physical credit card; they only need the card information since it can be used to make a purchase online.

“Everyone 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.”

– Criminal Code of Canada, section 342(1)

In Canada, credit card fraud is a punishable crime. The Criminal Code of Canada states that credit card fraud includes the following:

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

4 common types of credit card scams

There are various ways that people can obtain the credit card information needed to commit a credit card scam. Some of the most common methods include:

  1. Calls from the “fraud department.” Scammers will call and impersonate representatives from a credit card fraud department. In order to “stop fraud,” they’ll ask for your credit card information.
  2. Phishing. These are emails or text messages that appear to be from legitimate businesses or entities that ask for your credit card information.
  3. Card skimmers. These are small, plastic machines that are hooked up to ATM or gas pump card readers. They have the same scanner as actual card readers and are challenging to detect.
  4. App skimmers. Similar to card skimmers, skimming apps can read digital credit card data. In order for app skimmers to work, the sensors must be physically close to your phone or device. However, it can read through pockets or purses.

Credit card fraud detection indicators

If you have fallen victim to credit card fraud, you may experience one or more of the following credit card fraud detection indicators:

  • Unknown inquiries. Every time you apply for new credit, an inquiry will appear on your credit report after the lender checks your credit score. If you notice inquiries or new accounts that aren’t yours on your credit report, you may be a victim of credit card fraud or identity theft.
  • Unknown transactions. If you notice purchases on your credit card that you didn’t make, someone may have used your credit card to commit fraud.
  • Fraud alerts. If your credit card issuer is sending fraud alerts, an unauthorized individual may have used your credit card.

How does someone obtain my credit card information?

There are a number of ways a fraudulent individual can obtain your credit card information:

  • Hacking into the computers of individuals or companies to steal credit card information
  • Sifting through your garbage or mail to locate credit card statements, banking information or other personal details
  • Phishing by using an email that appears to be from a real business to ask for credit card information
  • Swiping your credit card in a device that copies the information stored on the magnetic stripe
  • Installed devices on payment terminals that record credit card information
    Any communication asking you to use your credit card to make a purchase on an illegitimate website

Finder survey: In a typical month, how much credit or retail card debt do Canadians with different incomes carry?

Responseprefer_not_to_sayMiddle IncomeLower IncomeHigh Income
In a typical month, I do not carry a credit card balance75%20.17%29.24%21.77%
Less than $9910%10.64%18.13%7.48%
Between $1,000 and $4,9995%17.09%14.62%21.43%
Between $100 and $4995%19.33%18.42%17.01%
Between $500 and $9995%18.77%11.7%15.99%
Between $5,000 and $9,9997.28%3.8%5.44%
More than $10,0006.72%4.09%10.88%
Source: Finder survey by Pollfish of 1013 Canadians, August 2023

How can I avoid credit card fraud?

Fortunately, there are ways you can prevent credit card fraud from happening to you:

  • Shred sensitive documents. Any physical documents that contain credit card, banking or personal information should be shredded. This avoids the risk of someone finding your documents in the garbage.
  • Be wary of tampered mail. Any banking or personal mail that appears to be tampered with should be addressed. If it’s a new credit card or PIN, contact your provider and request a new card.
  • Don’t share credit card information. Store your credit card in a safe place and avoid sharing credit card information over the phone, email or text. If you must provide credit card details, be sure that you trust the entity and are in a private place.
  • Install anti-virus software. On the computer you use for banking and online purchases, install anti-virus software. You should also consider software that includes a firewall and anti-spyware. Avoid banking on public computers or public Wi-Fi networks because they won’t have this protection.
  • Routinely review reports. Make a habit of reviewing your credit card statements for transactions you don’t recognize. Also, check your credit report for unknown inquiries and credit accounts.
  • Choose strategic PINs. Birthdays and other obvious numbers are easy PINs to guess. Try to pick something less obvious, such as a family member’s birthday or a special anniversary date. Don’t share your PIN with anyone, not even your spouse or family members.
  • Report issues immediately. If your credit card is lost or stolen, report it to the credit card issuer immediately. In addition, report unknown transactions as soon as possible.

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

Even if you’re careful, you might fall victim to credit card fraud. Here’s what you can do to rectify the issue:

  • Create a record of the fraud. Write down what happened, including dates and times. Include what was suspicious and how you determined fraud was happening. Also document who you called to deal with the issue, such as financial institution representatives.
  • Contact your credit card issuer. As soon as you notice credit card fraud, notify your credit card provider. In most cases, the provider will handle the situation pretty quickly and drop the fraudulent charges from your account.
  • Credit report fraud alert. Contact Equifax and TransUnion, the two credit bureaus in Canada, and ask them to put a fraud alert on your credit report. You should also request a copy of your credit report to review for any other signs of fraud.
  • Report to the Canadian Anti-Fraud Centre. Through a paid partnership with the RCMP, Ontario Provincial Police and the Competition Bureau, the Canadian Anti-Fraud Centre collects information on economic crime.
  • Contact the local police. Report the crime to the police and send them any documentation you have.

What happens if my card has already been fraudulently used?

Fortunately, your card will be frozen or cancelled the moment you report the theft. Even better, most major credit cards have their own version of fraud protection, such as Visa’s and Mastercard’s Zero Liability protection. This means that you won’t be held liable for fraudulent transactions as long as certain eligibility criteria are met.

  • Mastercard’s Zero Liability Protection
    This feature relieves you of liability, provided that you’ve shown that you took care to protect your card from loss, theft or unauthorized use and notified your financial institution immediately after discovering that your card was missing.
  • Visa’s Zero Liability Policy
    Visa’s Zero Liability Policy similarly protects you from fraud, except it does not apply to transactions that Visa did not process. Certain commercial card transactions are also not covered by the policy.

Consult your card issuer about whether you are covered in your particular circumstances. An investigation will usually be required and may take up to a few weeks, during which time you may be offered a card replacement.

Reporting credit card fraud to Canada’s Big Five banks

Each of Canada’s five largest banks manages credit card fraud differently. Below is a summary of contact information for each institution:

BMO credit card fraudCall 1-844-837-9228 to report BMO fraud
Email with forwarded suspicious emails or texts as attachments
CIBC credit card fraudCall 1-800-663-4575
TD credit card fraudCall 1-800-983-8472
RBC credit card fraudCall 1-800-769-2512
Scotiabank credit card fraudCall 1-800-472-6842 to report Scotiabank fraud
Email with forwarded suspicious emails or texts as attachments

Do police investigate credit card theft in Canada?

Usually, only serious crimes result in a police investigation. If you only lost a couple of hundred dollars, which most financial institutions refund to you anyway, they may not do an investigation. In general, credit card fraud is investigated federally by the RCMP and Canadian Security Intelligence Service (CSIS).

Since credit card fraud is often committed over the Internet, it is traceable. This means there’s a pretty good chance of the individual getting caught if the work is put in. Scammers use triangulation to better conceal their tracks, but they can still be traced.

The police may not investigate your individual instance of credit card fraud if you report it. However, making a formal statement to the police could contribute to a larger case of credit card fraud.

Credit card fraud punishment in Canada

If the offender is caught, jail time for credit card fraud can range from 6 months to 10 years. In addition, a fine of up to $5,000 may be applied. Anyone who is convicted of credit card fraud will receive a criminal record, which limits their ability to travel and work as well as their overall reputation.

Is identity theft the same as credit card fraud?

Sometimes, credit card fraud and identity theft can overlap, but they are different. Credit card fraud involves stealing someone’s credit card information to complete an unauthorized purchase.

Identity theft is the process of stealing personal information, such as birth dates, Social Insurance Numbers (SIN) or bank account information. The personal details are then used to take out new credit, which could be credit cards, or otherwise impersonate someone else in an attempt to complete some kind of action. Like credit card fraud, identity theft is also a punishable crime in Canada.

What happens if you lie about credit card fraud?

If you report credit card fraud that isn’t really credit card fraud, this could be considered a crime, too. Most financial institutions will resolve credit card fraud by refunding the fraudulent transactions. However, they usually perform an investigation first, which means they may discover you lied. This could result in many things, such as being banned from using that financial institution’s services due to being flagged as a fraud risk.

Alternatively, mistakes happen. You may have reported credit card fraud in error because you didn’t recognize a transaction. If this is the case, notify everyone that the transaction was not fraudulent.

Bottom line

Credit card fraud is quite common in Canada. You can protect yourself by keeping credit card information confidential and remaining vigilant of fraud. If you’re a victim of credit card fraud, be sure to address the situation immediately as it will be easier to rectify.

Credit card scams FAQs

This article originally appeared on and was syndicated by

About the Author

Veronica Ott is a freelance writer who has written for numerous financial publications. She previously worked as a professional chartered accountant in the private equity and advertising industries.

About Finder

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Veronica Ott was a writer at Finder. She's written for numerous finance and business websites including Loans Canada, Borrowell and Fresh Start Finance. She previously worked as a professional chartered accountant in the private equity and advertising industries. See full bio

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