Chances are, either you or someone you know has been a victim of credit card fraud. It’s a crime that touches hundreds of thousands of Canadians annually.
We canvassed the LowestRates.ca staff about their credit card fraud experiences and discovered that nearly half of us have been on the receiving end of credit card fraud or had someone in our family who has. The finding makes sense given just how much credit card fraud is reported in Canada each year.
To help raise awareness during Fraud Prevention Month, here are just a few credit card fraud stories from our team, along with some of the key actions that they took (or should have taken). Remember, one of the best ways to protect yourself from this type of fraud is to learn from other people's experiences.
Jorge L., SEO Executive:
Jorge’s debit card was breached just last summer. He knew something was up when his card got declined at a store in Toronto:
“Each time I tried to complete the purchase, my card was declined. Knowing that I had money in my account, this was really, really weird, so I went to a nearby bank machine to check what was going on.
In the bank machine I was able to see that my debit account was down to $0! I immediately went home and checked my profile online (I was still thinking that this was probably just a mistake). I knew that on my online profile I would be able to get detailed information (I really didn't want to call the bank at this point because sometimes that can be time consuming).
On my profile I was able to see that my card registered at least 5 to 6 international transactions in the U.S. The info included specific ATMs in small towns in New York State.
Of course, I had to call the bank to tell them that it was not me. Once I talked to them, they cancelled my card and told me to go to a branch to get a new one and make a proper claim so they could investigate and give me my money back.
When I got to the branch, they asked me specific questions about the dates around the transactions made in the U.S. and if I had traveled recently, which certainly wasn't the case. They told me that they needed a few days to try to investigate the issue. In the meantime, I got a new card and I transferred money from other accounts to my debit card.
After a few days they called me and they asked me to go to the branch. They told me that they would give me my money back and they found the place where my number and pin was stolen. Turns out, it was a fast food place downtown where they asked me to swipe my debit card instead of using the chip (and the bank knew that I swiped my card there).
I remember that in the restaurant they had a message saying that the "chip reader" on the machine was broken and they asked me to swipe my card – chip technology is supposed to prevent scams like that.”
Jorge’s tale makes it clear that you should always opt for a credit card transaction where a chip and pin number is required. Plus, rather than panic, Jorge did the right thing by contacting his bank immediately. Keeping a cool head in these situations is important, although it’s obviously not easy when you suddenly realize that your account has been drained of its funds. Following up with your financial institution and giving them all of the information they need will ensure you get your money back promptly and without undue hassle.
Justin T., CEO:
Credit card fraud tends to follow Justin around. A few years ago, Justin's CIBC Aventura Platinum card was breached not just once, but three times. Justin’s run of bad luck started when he checked his statement online one day and saw several charges he knew were fraudulent. Diligent to a fault, he dutifully reported the activity, cancelled his old card, got a new card, and notified all of the vendors where he had set up pre-authorized, automatic payments with his credit card.
All seemed well until his new card became compromised just a few weeks later and he had to go through the whole procedure again. And again, a third time after that.
While CIBC reversed the fraudulent charges each time his card was breached, Justin still needed to methodically change all of his pre-authorized payments to go from the old card to his new card. Since Justin likes the convenience of automated payments for services like cable, phone, utilities, etc, he spent the better part of three separate afternoons providing vendors with his new card info. By the third time around, he was more than a little bit frustrated.
“All of the pre-arranged payments I had needed to be changed each and every time my card got breached.”
Even though your bank will usually reverse false charges, you still have to do the legwork of resetting your pre-authorized payments. It’s definitely annoying, but not doing it puts you at risk of defaulting on your bills, which could result in disruptions to the services you enjoy and even harm your credit score.
Justin T., circa the late 1990’s:
Justin’s other major credit card fraud incident occurred when he was at university and living in a student residence. Another student stole his credit card information and used it to buy online porn.
Justin’s credit card statement soon arrived in the mail and he quickly saw the rogue charges. What ensued was a modern-day “whodunit”, where Justin set about determining the identity of the perpetrator based on the time of day the transaction occurred and who could have gained access to his credit card, which had never actually gone missing.
After doing some investigating, Justin slowly narrowed down his list of possible suspects to just a handful of people, and the fraudster eventually confessed.
When you’re living in a semi-public place like a university residence, it’s especially important to keep your credit card secure at all times. Although credit card fraud continues to get more and more sophisticated, plain old theft is still way too common. Plus, with online transactions, all the fraudster needs is the information on the card rather than the card itself, so you may not even know you have a problem until you see your statement.
Justin L., Product Manager:
While Justin remains unscathed personally by credit card fraud, his father’s card was breached last summer:
“At the beginning of the golf season last year, he purchased some prepaid golf green fees at a discount before the season opened at a golf club near Nobleton, Ontario. He later found that he was charged for some Starbucks coffee cards in Seattle in addition to the green fees. Visa investigated and found that someone had stolen credit card information from the golf club and used it to purchase Starbucks cards - probably to sell to the public at a discount.”
Visa reversed the charges but, needless to say, Justin’s Dad probably won’t be buying golf green fees at that club again!
Pre-paying for stuff is convenient but it can also result in your credit card information being exposed to a lot of people, some of whom may not have good intentions. If you are pre-paying for something, doing the transaction with a chip and pin card will make it harder for fraudsters sell your credit card info For more information on how to protect yourself from credit card fraud, visit the Canadian Anti-Fraud Centre website or call your credit card company. We also recommend that you check in on our blog regularly to get the latest tips on credit card fraud issues in Canada.