What is Credit Card Fraud? Tips and Next Steps

It happens sometimes.  You might go long periods where things are going well, you go to any shop you want, you never worry if you leave your credit card at a restaurant or a bar.  Then, one day, you wake up to find a charge you’re not sure about.

Thousands of Canadians experience credit card fraud every year, and the numbers are only increasing.  The amount of technology available and in use by identity thieves continues to advance just as security protocols try to stay ahead of them. 

Let’s find out what credit card fraud is, what the most common types are, how to avoid it, and what to do if you’re a victim.

What Is Credit Card Fraud?

Credit card fraud is when someone acquires your personal information, specifically your credit card information, and uses it.  In fact, the Criminal Code of Canada says that, in order to be guilty of credit card fraud, all one needs to do is to steal a credit card – they don’t even necessarily need to use it.

In Canada, credit card fraud is punishable by imprisonment, fine, or both.

Most Common Types of Fraud

These days, most credit card companies have set up a fairly secure system. However, credit card fraud can happen in perfectly normal places. There are stories of some hackers that have a device that can pull credit card information from you without the card ever leaving your pocket.  Thieves that do this rely on skimming apps.

These apps can read your credit card information through purses, pants, and especially when they’re sitting on a table or bar top. They need to be somewhat close, but the high-level apps don’t take much time to process the information.

That’s somewhat rare and takes special programming, so most credit card thieves focus on the tried-and-true methods like skimmers.

Skimming is a type of theft where fraudsters sometimes place a device on or around legitimate ATMs.  When you use the ATM, your card works perfectly – except that the secondary device you didn’t even know was there has scanned your card and stored the information.  Skimmers come back later to collect the information and use it later.

Skimmers may also place a very small camera either on the ATM or around it that collects your PIN.  They might even place a fake PIN pad over the real one.  The ATM still works just fine, and you don’t know your information is being stolen.

The last two methods are somewhat old-fashioned, but credit card thieves still use them because they work.  Convincing phone calls from your credit card company or emails and text messages that mention your account being compromised – these sorts of communications are usually phishing attempts.

Phishing is a type of social engineering where credit card thieves send emails, text messages, or phone calls meant to trick you into giving any piece of personal information.  Sometimes a birthday or a phone security question will do.

They may not know your credit card number or security code, but if they know which credit card you use, a simple phone password may get them enough access to change something on your account and eventually gain full access.

These phishing attempts may be focused on getting this phone password or anything credit card companies use to verify you’re the one calling.

How To Avoid Credit Card Fraud

Ultimately, credit card thieves must come at you when you’re most vulnerable, and that is any time you take your credit card out of your pocket and use it.  Obviously, you can’t just go through life not using your credit card, so here are some tips to help you avoid credit card fraud.

1.       Beware of the “Fraud Department” – If you receive a call or an email from the “fraud department,” or something along those lines, it’s possible this is a phishing attempt.  Simply hang up or delete the email and call the number on the back of your credit card to verify you’re actually talking to your credit card company.  They will be able to confirm whether anything is actually wrong with your account.

2.       Cover Your PIN – When you’re at the ATM, it’s very difficult to know if a scammer is installed.  Unfortunately, it’s also a crime to tamper with an ATM machine, so if you’re caught picking at it to see if there’s a scammer, someone might get the wrong idea.  The best thing to do is cover the PIN pad when you’re entering your code, and check your account regularly for any questionable activity.

3.       Change Your Passwords – sometimes, your login information may find its way into the hands of credit card thieves.  Changing your password regularly can help keep your online account secure.

4.       Put Your Card Back In Your Pocket – This one is self-explanatory, but you should be taking your credit card back from the waiter, bartender, etc. immediately and putting it right back in your pocket or purse.

What To Do If You Experience Credit Card Fraud

Contact your credit card company immediately to report the fraud.

They may ask you several questions to make sure it’s legitimate, then you should receive some sort of communication saying a fraud investigation has been opened.  Once it’s complete, most card companies will send new cards immediately.

If you may have an idea who committed the fraud, you may also want to contact the local police.


Credit card fraud is unfortunately not uncommon.  It’s an indictable crime and can lead to prison time.  For the victims, there are many advanced ways that thieves can steal your information.  Fortunately, a few easy steps can help you avoid having to cancel credit cards and clean up the thieves’ messes.

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