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How to protect yourself from credit card fraud

Jan 21, 2020 4 minute read

How to protect yourself from credit card fraud

Credit card fraud is becoming an ever-growing concern for Canadians. Not only does having your credit card stolen affect you financially, but it can also affect aspects of your personal life. It is estimated to take an individual over 300 hours to clean up the mess that credit card fraud causes.

So what exactly is credit card fraud? Simply put, it is a type of identity theft that occurs when someone steals your credit card, credit card information or your PIN (personal identification number) without your permission.

As more Canadians are falling victim to this each year, it is important to take all the necessary precautions to keep yourself safe, especially around this time of year! Here are a few ways to help protect you from credit card fraud.

Keep it offline

Almost everyone nowadays owns a computer. The internet and other computer applications can make our everyday tasks so much quicker and simpler. Some of these tasks can include shopping, banking and communicating with friends and family. However, these types of online activities bring a ton of access points for someone to steal your credit card information.

Shopping online is a very common way for you to become victim to fraudulent activity. Make sure you’re cautious when using your credit cards online. Only enter your information on secure websites that you trust and always go directly to businesses’ websites instead of following links to them. Many scammers use a tactic called “phishing” to get your private information. They will send you an email that looks like it comes from a real business and ask you for your credit card information.

It is also important to make sure to be safe when using public computers or Wi-Fi hotspots. Remember to always clear the history and caches when using a computer in a public space such as a library or café, and try to avoid banking or online shopping when using these services.

Educate yourself about scams in your area

It is important for you to not only be aware of how to protect yourself from getting scammed, but also how to recognize scams in the first place. There are many resources online, such as your local police force and government websites that detail the specifics of scams occurring in your area. Once you are aware of local scams happening to other residents of your area, you will know what to avoid.

One thing to note is that many scams are actually formulated the same way, and use similar tactics. Remember to steer clear of websites, emails or phone calls that ask for or state any of the following:

  • Phone calls or emails stating they are police officers contacting you to collect overdue taxes owed to the CRA or you will be arrested. Police officers do not engage in any type of tax collection and do not arrest anyone for overdue taxes.
  • Phone calls or emails claiming to be from companies such as Microsoft, who ask for remote access to your computer to fix a certain problem. Microsoft and other similar companies do not call their customers for anything.
  • A representative from the bank cold calling or emailing to verify financial information. This is only ever done in person.
  • Companies who provide “easy credit” or “easy loans” and then proceed to ask you to pay a fee in advance of receiving the funds. This is illegal in Ontario.
  • Collection agencies or creditors contacting you approving credit that you have not applied for.

Consider getting Identify Theft insurance

Even if you follow all of the tips and steps discussed above, there is still a chance that you may fall victim to a credit card scam. After all, they are very common and sometimes hard to identify. This is why investing in identify theft insurance is truly the only way to protect yourself from becoming a victim of a credit card scam. This insurance policy is in place to reimburse you for any losses occurred as a result of identity theft or credit card fraud for up to $25,000. This is a very affordable way for you to get a greater piece of mind, as most premiums cost only approximately $20 a month. If you already have any insurance policy, such as for a house or car, most brokers can add an identity theft policy onto your existing policies for just a small fee, saving you quite a bit of money.

Identity theft insurance policies might include coverage for any of the following:

  • Lost wages (as a result of money spent by others or because of an absence from employment)
  • Family coverage as a result of lost wages
  • Lawyer’s fees
  • Daycare and eldercare expenses
  • Loan, grant and other credit instrument reapplication fees
  • Notary and filing fees
  • Cost of obtaining credit bureau reports

Is identity theft insurance necessary?

While it may not be a mandatory requirement for you to have this kind of coverage, it is highly recommended! Although there are laws in place that protect you from the repercussions of identity theft, you ultimately may end up paying lots of fees. Investing in identify theft insurance will make it so you don’t get stuck with any fees.

Another reason why having identity theft insurance is recommended is because the process of investigating fraud can take a long time, sometimes even up to a year. Victims can end up suffering dings to their credit score and may find it hard to obtain credit during this time. With this type of insurance coverage will help eliminate those risks.

Lastly, having an identity theft policy will help to not only fix any current identity theft issues, but with preventing them as well. This coverage usually comes with additional monitoring services. Your account and credit will constantly be monitored for red flags, and some companies even monitor the dark web to see if any of your private information is available there.

Need an identity theft insurance policy? You’ve come to the right place!

The process of getting identity theft insurance can be quite difficult, especially in regards to finding a policy that fits your needs at a good price point. That is why we recommend going with a BrokerLink broker. Here at BrokerLink, we do the shopping for you. We will compare all of your options for you to not only find you the best price, but also the best policy tailored to your specific wants and needs.

Hi! I’m Briana, your digital personal assistant. If you need help, click the avatar to continue.