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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.

Updated

Fact checked

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.

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      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.

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      Earn a Welcome Bonus of 3,000 AIR MILES when you spend at least $1,500 in eligible purchases within the first three months.
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