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Credit Fraud Prevention, Reporting & Rights

Credit fraud is the use of someone else’s personal credentials and credit standing to borrow money or make purchases without intending to repay the debt. Whether it’s card fraud, unauthorized transactions, or full-fledged identity theft, credit fraud is a serious issue many Canadians deal with. Here’s everything you should know about it.

How Credit Card Fraud Happens

We’d all like to believe that we’re doing everything we can to prevent credit card fraud. In reality, our credit card information can slip into a criminal’s hands with relative ease.

Identity thieves can look through your mailbox or your trash can and take letters and statements from financial institutions. They can install a device on publicly used machines that will steal your card’s info with just a swipe, or hack into personal computers. Thieves can even establish fraudulent websites that steal your info with a fake purchase.

Prevent Credit Card Fraud

The best way to keep yourself from falling prey to credit card fraud is to keep your card information to yourself. First, never share your credit card numbers or PIN numbers with anyone you don’t trust wholeheartedly.

Beyond this, make sure your credit card is equipped with a chip. Many financial institutions in the United States and Canada have made the switch lately. But if yours hasn’t, consider getting a card that has this fraud-preventing and security-enhancing chip. If your bank doesn’t offer them at this point, it may be time to find another place for your money.

Otherwise, try to limit the number of credit cards you carry. Shield your PIN number when entering it, and report any suspected fraudulent activity you see on your bank statements.

You can also take further steps such as:

  • Installing a mailbox with a lock
  • Signing the back of your credit and debit card
  • Shredding old cards and statements

When shopping online, make sure the website is trusted and legitimate before making online purchases. Furthermore, avoid giving out your credit card numbers, phone numbers, or account number over email or chat.

Your Responsibilities When Using a Credit or Debit Card

Make card security a top priority. One way is to keep a list of all your cards and account numbers in a secure place. Shred and discard old cards and statements, and never let your credit or debit card out of your sight when shopping. Stay safe online and over the phone, as well.

Steps to Take If You’ve Lost Your Credit Card

There’s no worse feeling than going into your wallet or your purse and finding your card not present. If this happens to you, contact your credit card issuer immediately and cancel the card right away. Financial institutions can then reissue you a new card promptly. In the meantime, monitor your accounts for any fraudulent activity or unauthorized transactions.

What to Do If You’re a Victim of Credit Card Fraud

If you discover fraudulent activity or unauthorized transactions, contact your credit card issuer or financial institutions. Secondly, make a record of what was purchased and when. Then, contact local law enforcement to file a complaint. Change your passwords and get a new debit card. Or, you can close the account and open a new one. You can never be too safe.

Recognizing an Unauthorized Transaction

In order to report an unauthorized transaction, you must first know how to recognize one. Any unfamiliar or unrecognizable purchase on your credit card statement can be an unauthorized transaction. Of course, sometimes some stores and retailers may show up under a name you don’t recognize, so think back to times and dates you made the purchases before calling it an unauthorized transaction.

Unfamiliar locations are another major clue to an unauthorized transaction, as well. Some cards and financial institutions will issue a fraud alert, but others leave it up to you to recognize these transactions yourself.

Your Right to an Investigation

When you find yourself a victim of credit card fraud, you have every right to an investigation. After all, why should you be left to clean up the mess someone else made on your account? For this investigation to take place, though, you must remember to report the card fraud immediately. If not, you’ll have to pay for it yourself.

Reporting an Unauthorized Transaction

If you’ve properly identified an unauthorized transaction, contact your financial institutions or credit card issuer and let them know right away what you’ve found. From there, you may contact the Canadian Anti-Fraud Centre and local law enforcement. 

When speaking to your financial institution or card issuer, let them know as many details as you can. Note when you noticed the transaction, how it came to your attention, where the transaction was made, and any phone numbers or account numbers you need to give them in order to corroborate this report themselves.

To issue a formal complaint, contact your local law enforcement and ask them to inform you of the best place to issue it. If the fraud is substantial enough, you may have to go all the way up to the federal level with your complaint. Once the complaint is made, the credit card issuer and the bank are responsible for gathering all the proper documentation for the criminal investigation. The card is the issuer’s property, and this makes it their responsibility to help with the investigation.

Paying for an Unauthorized Transaction

If you make your report in a timely and efficient manner, then you shouldn’t bear any responsibility for the transactions. The credit card is the property of the issuer, and they will take care of it as such. All you have to do is make your report quickly, ideally as soon as you have made certain the transaction isn’t authorized.

Resolving Unauthorized Credit and Debit Transactions

To properly resolve unauthorized credit and debit transactions, you need to report them immediately. Don’t let much time pass between you noticing the activity and alerting your financial institutions. Otherwise, you may have to foot the bill if you wait longer than 30-60 days. While you may be asked to make the minimum payment during the investigation, your investigation will hold the bank accountable and restore your funds once the investigation is complete.

Making a Complaint about an Unauthorized Transaction

If you reported the fraudulent activity to your financial institution and are not happy with the way it was handled you can file a complaint. You have the right to be respected during the investigation. All federally regulated financial institutions (FRFI) must have a complaint handling process in place. The process will have man steps or levels, each will try to offer you a solution. 

Step 1 Ask a representative for help

Know what solution you are looking for, a refund, or access to the product or service.

If you are not happy with the resolution ask for a written response. Include details of the complaint and the proposed resolution with an explanation. Ask to be moved to the next level.

Step 2  Contact the complaint or customer care department

Once you are working with the complaint department, they have 90 to solve the issue If they offer a solution that is not satisfactory you can escalate your issue to the third level. Remember to have them send a written copy of their proposal. If not offer is made within 90 days you can elevate your complaint to the fourth level

Step 3 Senior management

Now you are dealing with management. Same as before, explain the problem and request a solution. If you are still unable to come to a satisfactory conclusion this will be elevated to the fourth level. Request all offers be written for your notes. 

Step 4 External Complaints Body (ECB)

At this point, things have escalated to an outside source. There are two governing bodies that can help.

  • ADR Chambers Banking Ombuds (ADRBO)
  • Ombudsman for Banking Services and Investments (OBSI)

Your financial institution must tell you which ECB they belong to. If they change membership after your complaint has been filed but before it had been resolved, the ECB you are working with must transfer all information to the new ECB. All laws concerning privacy must be followed.

  • Not every complaint can be handled by the ECB. Each has its own Terms of Reference that outline the process and complaints eligible.  
  • Every complaint must be handled for free by an independent impartial representative. 
  • The representative will tell you how complaints are handles and provide and requested information. 
  • They have 30 days to tell you if the complaint falls into their purview outlined by their Terms of Reference. 
  • Within 120 days of receiving all the information, a final written recommendation will be made to you and the financial institution.  


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