Do you need personal cybercrime insurance?

This article has been updated from a previous version.

As cybercrime continues to flourish, growing increasingly sophisticated — and lucrative for criminals — how can Canadian consumers protect themselves and their digital assets?

In addition to setting up appropriate safety precautions and staying vigilant on email and social media, some Canadians may be considering adding some form of cybersecurity protection enhancement to their home insurance or condo insurance policy.

According to the Charted Professional Accounts of Canada, credit card fraud is the leading type of financial fraud. Their 2022 survey found that 46 per cent of respondents reported falling victim to one or more types of fraud at some point in their lives.

In 2022, the Canadian Anti-Fraud Centre (CAFC) was flooded with reports of fraud and cybercrime, culminating in an alarming $530 million in losses for victims. This figure represents a nearly 40 per cent surge from the already record-breaking $380 million in losses reported in 2021.

However, this increase in financial loss doesn’t reflect the total losses felt by victims across the country—according to estimates by the CAFC, only 5 to 10 per cent of fraud victims actually report the crime.

Coverage for identity theft and online fraud isn’t typically included as part of a standard home insurance policy, most insurance providers offer it as an add-on to your comprehensive home or condo insurance.

Examples of common cybercrimes

Personal cybercrime refers to illegal activities that target or use technology to harm individuals. These crimes often involve the unauthorized use of personal data, intrusion into personal devices, or the use of technology to commit fraud.

Here are some common types of personal cybercrimes:

Online account takeover: This involves unauthorized access to a person’s online accounts, such as email or social media, often to steal personal information.

Identity theft: Cybercriminals may steal personal information to impersonate individuals, often leading to financial loss.

Social engineering scams: These scams manipulate individuals into revealing confidential information or performing actions that benefit the scammer.

Ransomware: This type of malware denies a user’s access to their files or systems until a sum of money is paid.

How can I protect myself from identity theft?

With your home or condo insurance policy, most insurers will offer the option to add additional coverage for identity theft and legal expenses. Others may also provide coverage if you suffer a cyberattack on your computer or other connected devices, or are a victim of ransomware or a data breach.

However, your options will depend on the insurance company, so consult with your insurance agent or broker to find the best policy for you.

You can learn more about how to prevent yourself from becoming a victim of identity theft online through the Office of the Privacy Commissioner of Canada.

How can I protect myself from credit card fraud?

Your best defence against credit card fraud is to make it difficult for a crook to rip you off in the first place.

Keep your information private. Safeguard your credit card number and its personal identification number (PIN) like you would with cash. Don’t loan your credit card to anyone or share your account number over the phone or online unless you initiate the transaction with a company you know is reputable.

Related: Quiz: Are you exposing yourself to credit card fraud?

How credit and debit card companies protect you

Credit card providers and financial institutions provide their customers with varying levels of credit and debit card fraud protection.

Zero liability policies: Major card providers such as Visa, Mastercard, American Express and Interac can protect you against financial loss if someone uses your credit or debit card without your permission. These are included in their liability policies.

Unauthorized transactions: There’s a maximum amount you’ll be responsible for if someone uses your credit card without your permission. If a bank issued your credit card, the maximum amount is $50, unless you demonstrated gross negligence in safeguarding your credit card and its account information. In that case, you’re responsible for the total amount.

Debit card transactions: You’re not responsible for losses due to situations beyond your control, such as technical problems or if someone used your card when you had already reported it as lost or stolen. The maximum amount you’re responsible for usually can’t be more than the withdrawal limits of your debit card.

Responsibilities of card users: To receive a full reimbursement, you must notify your card issuer without delay of any unauthorized transaction, if you lost your card, or if someone stole it.

Read more: How to use a credit card chargeback

Surf to the Financial Consumer Agency Services’ website for more information about your rights and protection against unauthorized credit and debit card transactions.

Preventative measures against cybercrime

Protecting yourself from cybercrime requires taking the necessary preventative measures. The Royal Canadian Mounted Police provides resources consumers can access.

This includes the following:

• Use strong passwords and change them at least annually.
• Install a firewall, antivirus, and antispyware software on your computer or laptop.
• Be wise using social media and don’t overshare.
• Back up all data on your computers and mobile phones regularly.
• Keep your computer and mobile phone operating systems up to date.
• Do not open emails or click on links in emails from sources or people you don’t recognize.
• Periodically check all your banking and credit card statements and report any entries you do not recognize to your bank or credit card provider.
• If you move addresses, notify Canada Post, your bank, and your credit card provider of your new residential mailing address.
• Talk to your broker or insurer about adding identity theft and online fraud protection to your home insurance, condo insurance or tenant insurance policy if you don’t already have it.

However, if after all that, you still fall victim to identity theft or fraud, report it to the Canadian Anti-Fraud Centre, and the two national credit bureaus in Canada: TransUnion Canada and Equifax Canada.

Protecting yourself from fraud and cybercrime is an ongoing, proactive process. It requires a combination of awareness, vigilance, and the use of available protective measures. And even still, cybercriminals are becoming savvier at targeting peoples’ bank account information.

Stay informed about the latest types of fraud and scams, and be cautious when sharing personal information, especially online. Utilize the security features provided by your financial institutions, and regularly monitor your accounts for any suspicious activity. Remember, the key to combating fraud and cybercrime lies in prevention and early detection.

Read next: How to spot credit card fraud and what you can do to prevent it