How to avoid credit card fraud, traps and scams

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

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Many Canadians have been subject to credit card scams, and online fraud is unfortunately on the rise. While credit cards offer
“Zero Liability” policies that help to protect you against fraudulent charges, there are some strategies you can use to protect your account from fraud in the first place. You can use this guide to discover how you can protect your finances and what to do if you find yourself the victim of credit card fraud or a scam.

Who do I contact if I suspect that my credit card has been used fraudulently?

You’ll want to reach out to the following contacts:

Your bank

If you spot suspicious activity on your credit card account, contact your credit card provider immediately to freeze your account and resolve the issue. If you have the card handy, call the number that’s printed on it to speak to a representative. You can also refer to our list of contact numbers for the major Canadian credit card providers for more information. Most Canadian-issued cards are usually covered by Visa or Mastercard’s “Zero Liability” agreements or American Express’ Credit Card Fraud Protection, which means you should be refunded for any defrauded funds. However, terms and conditions will apply – so you’ll want to keep this in mind when using a credit card to make purchases, both online and in-person. For example, you may be required to report the issue within a set number of days.

The credit bureaus

Contact both Equifax and TransUnion to have fraud alerts placed on your credit reports. You can reach Equifax at 1-800-465-7166 and TransUnion at 1-877-525-3823.

The Canadian Anti-Fraud Centre

It’s important to always report fraud to the Canadian Anti-Fraud Centre (CAFC). You can submit a report online here or by calling 1-888-495-8501.

Your local police

Call your local police non-emergency line and report the incident.

      How does credit card fraud work?

      There are a few different types of credit card fraud that you should watch out for:

      • Card-not-present fraud. This involves your card details being used to make online and over-the-phone transactions, where there is no need for a physical card, PIN or signature.
      • Counterfeit card fraud. Fraudsters can use your credit card data to make a counterfeit card. They can get your data through a method called skimming or can buy it from black markets.
      • Not-received fraud. This is when someone accesses your card before you do, such as through your mailbox when you’ve applied for a new card.
      • Application fraud. In this case, someone might apply for a credit card in your name, using your personal details and then use it to make purchases and cash advances. This is often linked to further identity theft issues, as they would need to be able to provide enough documentation to actually get approved for a card in your name.woman's hands with credit card, laptop, and cellphone

      6 ways to avoid credit card fraud

      Credit card fraud can come in many forms. Here are some of the strategies you should use to protect your account:

      1. Keep your credit card secure.

      Always use your other hand to cover the keypad when entering your PIN at the checkout or withdrawing cash from an ATM. If you’ve lost your credit card, contact your bank immediately to cancel the card and get a new one issued as soon as possible.

      2. Regularly review your statement.

      As well as keeping track of your spending, it’s wise to regularly check your credit card statement to stay on top of any suspicious behaviour. This is relatively easy to do if you’re using Internet banking or an app.

      Although your bank will usually contact you if they spot suspicious transactions on your account (such as a large or overseas transaction), you may catch a fraudster early if you’re reviewing your statement. This is because they may test your account first by making a small transaction (at either a domestic business or one overseas) before making a big purchase. The sooner you spot any odd listings on your account and report them to your bank or credit card provider, the better.

      3. Check your credit reports.

      As well as your credit card statement, you should also monitor your financial history through your credit reports. It’s important to review both of your credit reports – one issued by Equifax and the other by TransUnion. If you see any listings (such as applications) that you didn’t make, contact the relevant card provider and the credit bureau immediately to investigate the issue and have it removed from your report.

      You can request a free copy of your credit report from both Equifax and TransUnion.

      4. Use secure websites.

      When you’re shopping online, look for https:// at the beginning of the website address instead of http://. This means that the website has added security and you’re less likely to be a victim of fraud. Also check for the small lock beside the URL, which indicates added security.

      You should also look at the website’s reviews to see if there is any evidence of negative feedback or poor reviews of products. If an item is offered for considerably less than the online retail price, you should be wary as it could be a scam.

      When you’re using your credit card online, you could also consider using encrypted services, such as PayPal, which allow you to shop without sharing your financial details with the website.

      5. Be wary of suspicious emails, text messages and calls.

      The correspondence will vary, but a scam email or text message could be asking you to update your details, reporting an overdue account or flagging a fraudulent transaction. Messages claiming you’ve won a prize or competition are also common. So be extra cautious if you haven’t entered a competition and don’t provide your personal details to an unfamiliar caller or in response to an unexpected text message.

      If you receive an email or text message that appears to be from your bank, always check the phone number and address that it’s from before responding. Don’t click on any links or download any attachments from any email. If you’re suspicious, don’t respond and contact your card provider directly via the contact number listed on their website instead. Banks and card providers will never send an email asking you to update or change your password.

      Other tell-tale signs of a phishing email include addressing the email to “customer” rather than your full name, spelling and grammatical errors, odd symbols and incorrect logos. If you suspect these are suspicious, you can report it to the CAFC, mark it as spam and block the email or contact number.

      If you receive a call from someone who claims to be your bank and asks you to confirm your card information, don’t provide any information. Instead, contact your bank directly using the contact details listed on their website to find out if it was a legitimate call. You should be especially careful if the call is from an international or blocked number.

      6. Notify your bank if your address or contact details change.

      If your residential details change, contact your bank to have your details updated so that any new cards or bank statements aren’t sent to your old address. You should also update your contact information if it changes so that your bank can contact you regarding a potentially fraudulent transaction on your account.

      Bottom line

      Credit card fraud can be an overwhelming experience, but it’s important to remain calm and contact your card provider as soon as possible. There are steps you can take to deter fraud such as paying close attention to your credit card transactions, monitoring your credit reports occasionally and ensuring you always shop at trustworthy online stores.

      Compare credit cards with purchase protection

      Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Benefits with this card Description
      American Express Cobalt Card
      19.99%
      22.99%
      $120
      N/A
      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
      19.99%
      22.99%
      $0 annual fee for the first year ($150 thereafter)
      $80,000
      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®
      11.9%
      11.9%
      $0 annual fee for the first year ($25 thereafter)
      N/A
      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.
      Scotiabank Passport  Visa Infinite Card
      19.99%
      22.99%
      $139
      $60,000
      Earn 2 Scotia Rewards points for every $1 spent on eligible grocery store, dining, entertainment and daily transit purchases, and earn 1 Scotia Rewards point for every $1 spent elsewhere.
      Earn up to a total bonus of 40,000 Scotia Rewards points (up to a $400 travel value) in your first year. Earn 30,000 Bonus Scotia Rewards points when you spend at least $1,000 on eligible purchases within the first three months. Apply by July 1, 2020. Plus, earn 10,000 Bonus Scotia Rewards points each year when you spend at least $40,000 annually on eligible purchases (and earn 2,000 Bonus Scotia Rewards points for every additional $10,000 in purchases thereafter).
      HSBC World Elite® Mastercard®
      19.9%
      22.9%
      $0 annual fee for the first year ($149 thereafter)
      $80,000
      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
      12.99%
      12.99%
      $20
      $15,000
      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.
      The Platinum Card from American Express
      N/A
      N/A
      $699
      N/A
      Earn 3 Membership Rewards points for every $1 spent on eligible dining in Canada, 2 Membership Rewards points for every $1 spent on eligible travel purchases as well as hotel and car rental bookings made with American Express Travel, and earn 1 Membership Reward point for every $1 spent on all other eligible purchases
      As a new Platinum Cardmember, earn up to 60,000 Membership Rewards points in the fist six months. Earn a Welcome Bonus of 50,000 Membership Rewards points when you spend at least $3,000 on eligible purchases within the first three months. Receive an additional 10,000 Membership Rewards points after six months of cardmembership
      SimplyCash Preferred Card from American Express
      19.99%
      22.99%
      $99
      N/A
      Earn 2% cash back on all eligible purchases
      Earn 5% cash back on all eligible purchases in your first six months (up to a maximum spend of $6,000, or $300 in cash back).
      American Express Business Edge Card
      19.99%
      22.99%
      $99
      N/A
      Earn 3 Membership Rewards points for every $1 spent on eligible business essentials including office supplies, electronics, rides, gas, eats and drinks (up to an annual earn of 75,000 Membership Rewards), and earn 1 Membership Reward point for every $1 spent on all other eligible purchases
      Earn up to 42,000 Membership Rewards points in your first year. Earn a Welcome Bonus of 30,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases
      American Express AIR MILES Platinum Credit Card
      20.99%
      22.99%
      $120
      N/A
      Earn 1 AIR MILE for every $5 spent on eligible food, drink, gas and transit purchases (up to an annual spend of $30,000), and earn 1 AIR MILE for every $10 spent on all other eligible purchases (and after the $30,000 annual spend)
      Earn a Welcome Bonus of 2,000 AIR MILES when you spend at least $1,500 in eligible purchases within the first three months.
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      *The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

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