First steps card fraud victims should take

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You many think you're too smart to fall victim to credit card fraud, but it can happen to anyone, even the most prepared consumers.

Canada's Anti-Fraud Centre reported 5,879 credit card fraud victims in 2016. Meanwhile, six months into 2017, over 3,000 Canadians reported a collective loss of $4,230,761.24.

Here's what you should do immediately after you discover you're a fraud victim, and how you can be even more on guard against future fraud.

Stop the bleeding
The first thing you need to do is stop the fraudster from making more purchases. But you can't stop something you don't realize is happening, so the prerequisite to this step is to always keep an eye on your statements.

"It's really important that consumers check their statements regularly to make sure they don't find transactions they didn't make or approve," says Lynne Santerre, media relations officer for the Financial Consumer Agency of Canada.

If you do spot fraud, contact your credit card provider right away.

Not only will the issuer be able to cancel your card, but it will likely dismiss any fraudulent charges so you don't have to pay for them. Visa, Mastercard and American Express all have zero liability policies when it comes to fraudulent purchases.

"If a consumer's credit card was taken without their knowledge and an investigation determines that purchases were made without their consent or control, then, in most cases, these policies protect consumers," says Santerre.

There are some exceptions to zero liability policies, though. For instance, if you were irresponsible with your PIN (e.g., you wrote it on the back of your card, or it was too easy to guess), you may not be protected.

Prevent possible identity theft
In addition to monitoring your statement regularly and alerting your credit card company of any fraudulent activity, there's one more thing that's very important to check.

"Check your credit report just so you can make sure no one is using your credit card information to open up other accounts in your name," says Santerre.

Every Canadian has a right to receive a free credit report once a year either online, by mail or in person from TransUnion and Experian.

"You can also put a fraud alert on your credit report," says Santerre. "If someone is trying to take out credit in your name, it would flag it to you and require a financial institution to call you before approving more credit in your name."

Having a fraud alert on your credit file does not prevent you from using your credit card, as you normally would, but you will get a call every time you apply for new credit. You also will have to confirm your identity before credit may be granted to you.

Future fraud prevention
After you've reported fraud to your credit card company, change your PIN right away.

"It's important to choose a PIN that's difficult to guess, so avoid using numbers that people may guess, such as a social insurance number, a phone number or a birthday," says Santerre.

Of course, there's just as much chance that your credit card information was obtained because you mistakenly entered your card details into what you thought was a legitimate website.

To prevent yourself from getting phished in this way, Santerre advises making sure the website you're using to enter your financial information has the https: prefix so you know communication to that website's network is secure.

"Try to use only secure, trusted or preferred websites when divulging personal information or buying something online," she says.

Meanwhile, make sure your computer firewall, anti-malware, anti-spyware and anti-virus software are all up to date. Don't use unsecured networks or public computers to bank or shop online and don't give out your credit card information over email or over the phone.

"If you're not sure if an email that looks official and asks for personal information is legitimate, don't be afraid to call your bank, credit card company or service provider it supposedly came from to double check that it's real," says Santerre.

If someone insists you give them your credit card information over the phone, it's OK to hang up and take a day to think about it before calling them back. Santerre says you should never give credit card information over the phone, especially in a public place where someone else may overhear you.

"Legitimate credit card companies won't ask for personal information over the phone, and it's important to always use the telephone number found on the back of the card when you want to contact the credit card issuer."

See related: Is there privacy in a cashless society?, How to avoid grey charges on your credit card, What to do if you spot a fraudulent credit card charge
Published July 11, 2017

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