15 January, 2020

Spotting Credit Card Fraud

Credit card scams are one of the most common types of financial fraud Canadians will encounter. Fortunately, there are some simple ways to prevent it from happening to you. Being aware of the tactics used by fraudsters will allow you to protect yourself. With as many as one in five Canadians succumbing to credit card fraud every year, taking the right precautions will be well worth your time1.


A problem with your card/suspicious charge


Ironically, one of the most common credit card fraud schemes relies on your desire to avoid being defrauded. A fraudster calls you on the phone and claims to be a representative of your credit card company, flagging a suspicious transaction. As part of the caller’s phony check, they will ask you to provide additional information to verify who you are. Such information might include your full credit card number, the three- to four-digit Card Verification Value (“CVV”) security number on your card and other personal details. This scheme is also known as the “bank investigator” scam.


Most likely, the fraudster has gathered enough partial information about you (e.g., your name, address, phone number, and your full or incomplete credit card number) to seem credible. This information can be obtained from marketing lead lists or even from unshredded bills found in your garbage or recycling. Armed with your name, contact information, credit card number and CVV, the fraudster has the information necessary to commit fraud using your credit card.


New approaches to an old scam


New technology has enabled fraudsters to adapt their tactics in response to greater awareness of typical fraud scams. For example, the fraudster may attempt to gain your trust by asking you to hang up and immediately call the legitimate 800 customer service number on the back of your card. What many unsuspecting victims don’t realize is that some fraudsters have technology that takes advantage of the five- to 25-second delay in disconnecting landline calls in Canada. You might think you’ve hung up, but in fact, when you call the 800 number, you’re being routed to an accomplice/associate, who will naturally verify the legitimacy of the scam and attempt to carry it through.2


Other newer scams include the fraudster posing as a technical support worker from your credit card company or bank and requesting remote access to your home computer to help fix a problem. In other cases, the fraudster will ask you, in the guise of a fraud investigation, to accept a deposit or e-Transfer into your account, and then tell you to transfer the same amount to another account. The first deposit is not legitimate and will not clear, but the amount you transfer from your account to the fraudster’s account, unfortunately, will.


How to protect yourself


When confronted with a scenario like the ones described, there are several ways you can prevent credit card fraud from happening to you.

  • When in doubt, hang up the phone without saying a word.
  • If you are ever asked to hang up and call back the legitimate 800 number on the back of your card, hang up and wait for an hour or call from a different phone (e.g., your mobile or your landline, depending on which one you received the initial call on).
  • If you receive a voicemail telling you about a suspicious transaction, and if it concerns you, then ignore the callback number they provide and instead call the legitimate 800 number on the back of your card.
  • When disposing of any document with personal or financial information on it, make sure it is properly shredded.

As fraudsters are always changing their tactics, it’s worthwhile to pay attention to stories in the media and other information sources on the latest scams affecting Canadians. Furthermore, if you believe you have been the victim of fraud, immediately contact your credit card company, your financial institution(s) and your local police.


1.CPA Canada Fraud Study, Chartered Professional Accountants Canada, February 21, 2019.

2.“RCMP Warns of New Credit Card Scam,” greedyrates.ca, December 29, 2019.