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Avoiding Credit Card Fraud

A credit card is a great payment tool that provides a variety of benefits including convenience, universal acceptance, rewards, credit building, tracking of purchases and much more. As the popularity of credit cards has increased so has credit card fraud. In fact, according to the Canadian Bankers Association credit card fraud in 2012 totalled almost $440 million. Credit card issuers have been improving their card security and fraud prevention measures but fraudsters are still managing to pull off elaborate schemes to defraud consumers. Fraud can occur when your card is stolen, copied, or when someone obtains your credit card information. Fortunately, credit card companies waive any unauthorized charges to ensure that consumers are never out of pocket as a result of experiencing fraud on their credit cards.

Keep the following in mind when using your credit card and you will protect yourself from fraud:

  • Keep your card in a safe location - Keep your credit card in a safe place at home as well as when you carry it. Avoid carrying credit cards that you don't plan on using.
  • Don't disclose your credit card information to anyone - If you disclose your credit card information to someone, you risk that person using it without your permission. There is also the risk that a third party may retrieve this information if the person you disclose it to does not properly protect it.
  • Don't choose a PIN that's easy to guess - Your date of birth or something else as obvious constitutes an easy to guess PIN. A random combination of characters is usually the most secure type of PIN.
  • Shield your PIN from others when entering it to withdraw cash or pay for goods/services - Your PIN provides a layer of protection in case you lose your card. If someone finds it and tries using it, they will be unable to make large purchases without knowing the PIN.
  • Keep your credit card in sight when handing it to someone to make a purchase - Keep your eyes on your credit card at all times when it is out of your hands. Fraudsters can engage in an act called skimming where they run your card through a special reader that copies it. Make sure your card is being run through a credit card processing machine when making purchases. Multiple swiping can also occur if you're not paying attention which results in you being charged multiple times for the same product or service.
  • Be careful disclosing your credit card information over the phone - When someone calls you asking you for your credit card information perceive it as a red flag. It can often mean a credit card fraudster impersonating your credit card company. Only disclose your credit card information when you're initiating the call to the credit card company yourself.
  • Be careful when using your credit card online - Make sure you only use well trusted sites when making online purchases with your credit card. Also, never respond to emails asking for your credit card information, they are often frauds.
  • Don't sign a blank credit card receipt - Always make sure that there is an amount included before signing a credit card receipt. Also, make sure to put a line through any blank spaces. This will prevent additional amounts being added to the receipt after you sign it after you depart.
  • Keep all your receipts and compare them with your credit card statement on a monthly basis - If you use your credit card often it can sometimes be hard to spot unauthorized charges, especially for relatively small amounts. Keeping your receipts and comparing them against your credit card statement will help you discover unauthorized transactions.
  • Shred documents containing your credit card information - If a fraudster finds a credit card statement belonging to you or even a post-it note where you've written your credit card information, they may be able to place charges on your card without you knowing. Make sure that you shred any documents containing your credit card information (i.e. monthly statements) after reviewing them. If you need to keep any documents on file make sure that they are stored in a safe place.
  • Use credit cards with enhanced security features - Make sure that you're using a card with a magnetic chip. If you're not, request it from your credit card company. Cards with magnetic chip are practically impossible to replicate.
  • Notify your credit card provider immediately when your address is changing - Notifying your credit card company of an address change ahead of time will ensure that they don't send statements or any other communication to your old address where it can be seen by others.
  • Notify your credit card provider immediately if you'll be travelling - Notifying your credit card company of any travel plans will allow them to more accurately flag unauthorized transactions and ensure that your card is not frozen the first time your use it in the country you've travelled to.
  • Apply extra caution with your credit cards when travelling - Make sure that your credit card is secure when travelling. If leaving it in a hotel room it is a good idea to put it in a safe, if one is available.
  • If your card has been stolen or you've noticed an unauthorized transaction, report it immediately - The quicker you report a lost/stolen card or an unauthorized transaction, the faster the credit card company can act to freeze your account to ensure that the fraudster is not able to access your card again.
  • When receiving a new credit card, sign it and destroy the old card - Signing the back of your credit card is a security measure. It is important to destroy your old credit card by cutting it up. Even old credit cards that are no longer active can be used by fraudsters to defraud you.
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