Protecting Yourself From Credit Card Fraud in Canada

Falling victim to credit card fraud is nothing short of a financial nightmare. Sadly, it has become a reality for millions across Canada and beyond.

Statistics About Credit Card Fraud in Canada

Cornell Law School defines credit card fraud as “a form of identity theft that involves an unauthorised taking of another’s credit card information for the purpose of charging purchases to the account or removing funds from it.”

There are two subtypes of credit card fraud: application fraud and account takeover. Application fraud is when a scammer attempts to open a credit account in another person’s name.

Alternatively, account takeovers are when a thief steals a person’s account and uses it to complete an unauthorised purchase. Both situations are very unenviable, and the following stats highlight the severity of the problem in Canada.

• The number of account holders reporting at least one instance of credit card theft has grown 71%, while the figure is now twice as high as identity theft.
• Credit card theft in Canada resulted in a $569 median loss for users in 2024.
• Over half of all Canadians (53%) have been victims of financial fraud at least once in their lifetime.
• In 2018, it was revealed that a major credit card malware scam targeting the Canadian branch of 1-800-FLOWERS had gone undetected for four years.
• Attempted credit card theft has witnessed the biggest increase in the financial services sector (217.54%), where the rewards are huge.

Protecting Yourself With the Right Credit Card 

While credit card fraud is a concern, there is a reason why over 100 million credit cards are in circulation in Canada. They provide a financial safety net when you need to make a purchase, while they can also be used to build your credit history.

When looking for credit card offers in Canada, consider choosing a provider that includes several anti-fraud features, including but not limited to:

• Requiring you to confirm online purchases via a banking app
• Sending you messages and notifications about suspected fake credit card transactions
• Blocking magnetic stripe transactions
• Setting modest transaction limits, even when the overall credit limit is set to a far higher level

It’s also worth researching a credit card company’s track record of supporting customers who have become victims of credit card fraud. The best companies ensure that victims are only liable for a small percentage of the stolen funds, which can be comforting if you ever fall victim to fraud.

Understanding the Latest Credit Card Frauds

Knowledge is power, and making yourself aware of the various tactics a credit card scammer may attempt will put you in a far stronger position. It’s crucial to build a comprehensive strategy that is capable of protecting you from both online and offline fraud.

While 62% of Canadians now take proactive steps to protect themselves from credit card theft, many people leave themselves open to attack by not understanding the latest scams or fraudulent activities that crooks try. Some of the most common examples are:

• Credit card skimming machines: Devices that fraudsters add to an ATM or other legitimate card reading device to capture your card data. The scanner looks virtually identical to the original device and often goes undetected. They don’t stop the genuine transaction either, which makes it hard for you to identify a problem.
• Phishing scams: Phishing scams can come from emails that direct you to a fake website or phone calls that encourage you to hand over sensitive data. One of the common tactics is for fraudsters to say that they are from your bank’s fraud department to spark a sense of panic with hopes of gaining your details.
• Credit card skimming apps: These allow fraudsters to copy credit card details, as long as they are within a few feet of it. Alternatively, some people will try to take photos or capture the details on a nearby person’s credit card, especially at places where consumers are likely to make payments.
• Online data breaches: Cybercriminals may look to break into a person’s email account or online banking account to capture details and make an unauthorised purchase on credit card systems. This could extend to breaches of a company’s data systems. Sadly, there’s not much you can do about this except stay vigilant.

Always think twice before providing your details to another person and using your card online or in public. The harsh reality is that a large percentage of problems stem from human error. Remove this, and your situation will look a lot healthier.

Taking Practical Steps To Protect Your Credit Card

The main issues are that someone has:

• Stolen your physical credit card
• Gained access to your personal credit card info
• Gained access to your personal identification number
• Managed to open a new credit card in your name

Therefore, it’s important that you implement the right steps to protect your credit card data from potential fraudsters. There are several areas to focus on:

Home Credit Card Protection

• Be sure to shred credit card paperwork as fraudsters can go through the trash.
• Destroy old credit cards once they have expired.
• Keep credit cards safely stored.

Online Credit Card Fraud Prevention

• Use firewall protection, antivirus, and anti-spyware software.
• Only use secure websites and navigate to them through your browser rather than clicking links.
• Never provide your credit card details when using a public Wi-Fi network.

General Credit Card Fraud Prevention

• Only carry one credit card with you at any given time.
• Always cover your PIN when using your credit card.
• Keep track of your credit report for signs of suspicious activity.

Telephone Credit Card Fraud Prevention

• Never give your details out in public.
• Ask to phone companies back and use the telephone numbers you know.
• Request further info from anyone wanting card details.

What To Do Following Fraud Detection

Even the most cautious user cannot guarantee that their details are fully protected and can fall victim to credit card skimming and other scams.

If you suspect fraudulent activity, act fast to prevent any further damage to your finances or credit health:

• Call your bank or credit card provider to put a stop to all activity.
• Contact the credit bureaus to make them aware and get this activity stricken from your record.
• Call the police to formally file a criminal complaint and protect yourself against further forms of identity theft.
• Contact the Canadian Anti-Fraud Centre to report the incident. 

Of course, you should subsequently take steps to protect other personal information ranging from email accounts and website passwords to using two-step verification for online purchases. When you put a stop to the problem before it escalates, you can then focus on repairing the damage.