How to protect your credit card information from fraud
Tech-savvy Canadians aged 18 to 34 represent the country's most active adults online, sharing vital personal data on social networking and job-related websites, according to a February 2013 Visa Canada survey. The research also found that 45 per cent of these so-called "Millennials" admit to lending their credit cards to friends or disclosing account information via email, phone or text.
But seemingly carefree exchanges can lead to serious trouble. Forty-three per cent of survey respondents who overshared their financial information said they had been victimized by payment card fraud, compared to just 19 per cent for Canadians who were more discreet.
No matter what your age, it's important to understand fraud risks. Below are answers to some frequently asked questions, to put the dangers in perspective.
1. Who are the fraudsters?
According to a March 2012 press release by the Royal Canadian Mounted Police, criminal organizations commit 80 per cent of fraud-related infractions. Sheldon Wolf, president and CEO of Canada Credit Fix, describes today's cyber crooks as "invisible, intelligent, fast and half-way around the world sitting at their computers."
But that doesn't mean that consumers should let down their guard down around friends and family. Many identity-theft crimes are perpetrated by someone the victim knows and trusts.
2. What are the riskiest types of fraud?
Fraud losses on Canadian-issued credit cards hit $436.6 million in 2011, up 19.4 per cent from 2010, according to Canadian Bankers Association statistics. The biggest category by far is "card-not-present" offences in which fraudsters steal credit card information rather than the physical plastic and use it to make purchases online, over the phone or by mail. Those crimes made up two-thirds of credit card frauds in 2011.
3. Where do fraud dangers lurk?
In a word, everywhere. After posting their photos, address, employment history and other personal data on the web, consumers remain vulnerable from the digital footprints left online -- no matter where they or the criminals are located. Millennials who take advantage of advanced technologies may be most at risk, particularly if security features on their devices have not kept pace with hacker capabilities.
Wolf notes, "The younger generation is great at shopping and likes to upgrade their tech toys almost immediately after the launch of something new." Web shopping is easy and, with a click of a button, users can buy virtually anything from their immediate location. Innovative wireless and mobile technologies can transmit signals through unsecured public zones where fraudsters can intercept a consumer's credit card information.
4. When should you be on the lookout for
Fraud crimes often happen when people least expect them. Comments Wolf, "It is very important that proper diligence and precautions are taken at all times."
Canadians should be extra careful on the phone. The FCAC reports that the telephone was the preferred tool of mass-marketing fraudsters in 2009, used to contact 57 per cent of targeted victims. Email scams placed second, accounting for 36 per cent of the targeted audience.
5. Why fuss about fraud?
The magnitude of fraud damages in Canada is daunting. The RCMP estimates that fraud-related crimes create up to $30 billion in losses each year. On its website, the FCAC asserts that scam artists target some 15 million Canadians annually. You don't want to be one of them, especially if the crime is identity theft.
"Credit restoration is simply a nightmare that no Canadian would ever want to go through," says Wolf about the after-effects of fraud. "True credit restoration is not complete even when the credit report is revised."
6. How can you recognize fraud?
The good news is that a little knowledge goes a long way in protecting you. The FCAC's online fraud protection toolkit highlights red flags to watch out for, such as:
- Emails or telemarketers that ask for too much personal information, such as your birthday or account details;
- Claims that you have won a lottery or contest that you never entered, or that tell you to send a fee or give financial information to collect your prize;
- "Get rich quick" or work-at-home schemes that say they require little effort or investment.
Also among the FCAC's warning signs are questions probing for social insurance numbers, addresses and financial information like credit card numbers and passwords.
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 ...