Don't give credit fraudsters a run for your money
When Charmian Christie walked up to the cashier at a local clothing store nearly two years ago, she couldn't have predicted what would happen that day. Her card? Declined. The reason? No idea.
"We pay off our bill every single month," says the Guelph, Ont., resident. "We do not carry a balance. So there was no way that we were anywhere near our credit limit."
After paying for the purchase with another card, Christie immediately called the declined card's issuer to make an inquiry. Within minutes she had her answer. Fraudsters had somehow managed to swipe private, personal credit information from unsuspecting shoppers and compromised their cards. Her case was just one of many in the area.
It's stories like Christie's that give In fact, according to the Canadian Bankers Association, in 2011 financial institutions reimbursed more than $436 million to their Canadian credit card users to compensate for criminal activities.
Still, there's no reason to be paranoid, just careful, maintains Sgt. Brian Trainor, a retired police officer with the Saskatoon Police Service who now tours the country to educate people about fraud, senior financial abuse and cyberbullying. According to Trainor, the first line of attack against credit fraud comes down to one device every home and office should own: a paper shredder.
"A lot of people are still throwing their bills in the garbage. Crooks come along and go through that garbage to find credit card information," he says.
Yet it's not simply bills you have to worry about, says Michael D'Sa, head of payment system security at Visa Canada. It's important to protect any personal information, from phone numbers to RSP account material. That's because fraudsters are not only using credit card numbers to buy things illegally online or over the phone, but they can piece together information to open a whole new card with your name on it - and without you knowing about it until it affects your credit rating.
So what should you do if you've been a victim of fraudulent activity? First, take a deep breath.
Trainor says your first call should be to the police to report the incident. You will receive a report number, which you can then give the card issuer. The credit card company will then send a one-page affidavit for you to sign and send back by a specific day. Once received, the charge is wiped off the card.
Not everybody realizes their cards have been compromised right away, however. Identity theft can become more serious if you notice that bills arrive on accounts you don't own, collection agencies start calling about a debt you don't think you have or your credit report shows other mystery debts.
These are all red flags to contact the police, your financial institutions and to let your telephone, cable and utilities servicers know that someone may be using your name fraudulently. It's also important to contact credit report companies, TransUnion and Equifax and add a protective statement to your credit file until the matter is resolved.
Ultimately, protecting your credit comes down to thinking like a fraudster, says D'Sa.
"Understanding what criminals are looking for will help you know what to protect," he says.
Most recent Card Fundamentals Stories
- Credit report basics: how to check it, why it matters -- What is a credit report, what's in it, how do you check it and, perhaps most importantly, do you even have one? ...
- What are interchange fees -- and why do they matter? -- Credit cards offer plenty of perks to consumers, but using plastic comes at a cost, even if you don't realize it ...
- Don't let card issuer's changes throw you for a loop -- Your issuer can change various aspects of your card agreement. Here's how to prepare for such updates ...