What You Need to Know:
- Banks have very sophisticated security systems and teams of fraud experts to monitor transactions and protect you from criminal activity.
- While banks work hard to prevent fraud, there are simple steps that you can take to protect yourself.
- If you are a victim of fraud, your bank will launch an investigation and, in many cases, you will be reimbursed for any money that was stolen.
The banks in Canada take the issue of fraud very seriously and they are working around the clock to protect you. There are also simple steps that you can take to better recognize fraud and protect yourself. Here are some tips on the more common types of scams.
Debit Card Fraud
Debit cards are very safe, with more than 99 per cent of transactions occurring in Canada without incident each year. There are ways to avoid having your information stolen and your card copied.
- Always protect your Personal Identification Number (PIN): use your shoulder or your hand to shield your PIN when entering it onto the keypad.
- Never lend your card or disclose you PIN to anyone.
- Choose a PIN that would be hard to guess: do not pick things like your birth date, birth year, phone number or house number.
- Memorize your PIN: don’t write it down.
- If anything seems unusual about the ABM or payment terminal, don’t use it; report the situation to the bank, the retailer or the police.
- Regularly review your transaction history and report anything unusual to your bank immediately.
- Change your PIN periodically.
Banks have teams of fraud experts and highly sophisticated fraud detection and prevention systems to protect customers from debit card fraud. If you are a victim of debit card fraud and have not contributed to the fraud, , you will get your money back from your financial institution.
Credit Card Fraud
Banks and credit card companies take significant steps to protect customers and minimize fraud as much as possible. For example, did you know that:
- Banks’ systems can automatically detect unusual activity in a customer’s account? This means that steps can be taken to prevent fraud from occurring.
- Visa, MasterCard and American Express have zero liability policies in the case of unauthorized transactions? This means if you are a victim of fraud, you won’t be held responsible.
There are steps you can take to protect yourself, including:
- Report a lost or stolen card as soon as you notice it is gone.
- Regularly check your transactions online or on your monthly statement. If there are any charges that you didn’t make, report them to your card issuer right away.
- Never give out your card number over the phone or online unless you know you are dealing with a reputable company.
- Scammers will try to trick people into revealing information about their credit cards either over the phone or through e-mail. It’s important to know that your bank or credit card company would never call to ask for personal information like your credit card number, expiry date, PIN, or the security number on the back of your card.
Contactless cards are a few type of credit card that allows you to pay for small purchases by waving your card in front of a merchant’s contactless terminal. There have been news reports recently about electronic pick-pocketing, where a criminal with a card reader and computer can read the information on contactless cards and commit fraud. Contactless card transactions are processed through the same secure networks used for all other credit and debit card transactions. It’s important to know that contactless cards are embedded with multiple layers of security to protect you. For example:
- Short range — Cards must be very close to a reader for any data to be transmitted. The short range makes it difficult for criminals to gain access to card information from a distance and, even if they could, the card data cannot be used to create a counterfeit card and the encryption technology would make the stolen card information useless.
- Encryption — Each contactless transaction you make creates a unique encryption code, which expires after the transaction is finished. If someone was able to get close enough to steal data from your card, they would not be able to use the encryption code because it would have expired.
- Limited information – Your name is not transmitted during a contactless transaction. For Visa and MasterCard, the three-digit security code on the back of your card is also not transmitted.
- Low transaction limits – Contactless transactions generally have low limits and any larger purchase will require you to enter your PIN. If your card is lost, this will prevent large purchases from being made using the contactless function.
- Zero liability – Visa, MasterCard, American Express and Interac all have zero liability policies for credit and debit card holders. If you are the victim of fraud, you won’t be held responsible and will get your money back.
Email fraud — sometimes called “phishing” or “brand spoofing”— uses fraudulent email messages and websites that look like they are from a legitimate organization, such as a bank, credit card company, online retailer or government agency. The email you receive may look real, with company logos and branding, but you may have actually received this spam or mass email from a criminal.
Here are some simple steps that consumers can take to protect themselves:
- Be skeptical. Fraudulent emails can look like they come from a real bank email address. If you have any doubts about whether an email is from your bank or a reputable organization, contact them before responding to ensure that it is legitimate.
- Make sure that your home computer and mobile devices are protected. Install anti-spam, anti-spyware and anti-virus software and make sure they are always up-to-date.
- Never send or confirm your personal or financial information by email.
- Always enter your bank’s website using the website address (URL) that you know is accurate. Contact your bank to get the correct website address if you’re unsure.
- Check the domain name shown as the link in the email. When you click the link, if it does not match the name that appears in the browser at the top of the screen, then it may be a fraudulent website.
- Whenever entering personal information online, ensure that you are using a secure website. Look for “https://” rather than just “http://” in the address bar of your Web browser as well as a closed padlock.
- Regularly review your bank and credit card statements to ensure that all transactions were made by you.
- Check your credit report at least once a year by contacting credit reporting agencies Equifax Canada or TransUnion Canada.
The Canadian Bankers Association website has more information on how to safeguard your money at www.cba.ca/?cat=Fraud-Prevention.
You’ll learn more about:
- How to Bank Safely Online
- Tips for Choosing Secure PINs and Passwords
- What Seniors Need to Know about Financial Abuse
- Staying Safe Online
- WiFi Hotspot Scams
- Grandparent Scams
- Overpayment Scams
- Identity Theft
- Contactless Card Security
- Real Estate Fraud
- How to Protect Against Malware
- Phoney Bank Inspector Scams
- Avoiding Counterfeit Bills
- Staying Safe at the ABM
If you have general questions about banking in Canada, call the Canadian Bankers Association’s Banking Information Line at 1-800-263-0231 or send an email to firstname.lastname@example.org.
(Please note that if you believe that you have been a victim of fraud, you should contact the police and your bank immediately.)