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Consumer’s Guide to Credit Card Fraud

Although it’s not common, one of the things that can cause people to file bankruptcy or a consumer proposal is if they’ve been the victim of credit card fraud.  Here are some things you can do to protect yourself.

One of the most common ways that people fall victim to credit card fraud is simply by answering their phone and talking with (who they think is) their credit card company.

Typically, you will receive a phone call from someone claiming to be your credit card company asking you to verify your account number, card expiration date, and full name.  If you provide this information, the person has all they need to use your credit card fraudulently.  In your next credit card statement, you will likely find hundreds of dollars worth of fraudulent charges on his account.  Typically they are smaller amounts several times since your credit card company will often block large purchases.

Beyond being just annoying or inconvenient, credit card fraud costs all consumers, even those who have not personally been the victim of fraud. To offset the cost of fraudulently obtained goods and services, stores and credit card companies increase their prices. After being scammed cardholders can also find themselves struggling to repair clean credit records.


  1. Hold onto receipts to compare to bank statements. Periodically check credit reports to be sure someone has not opened any fraudulent accounts.
  2. Track all credit card information to protect against theft or loss. For each credit card, a record should be kept that includes: the issuing bank, contact information, card expiration date, and account numbers.
  3. Store cards separately from pin numbers. Without pin numbers, thieves will be unable to use cards in stores and at Automated Teller Machines (ATMs). Commit pin numbers to memory and destroy the written record for additional protection
  4. Diligently keep an eye on a credit card when handing over to make a purchase. Make sure to take it back after you make a purchase, shield it from the eyes of others in the location, and obtain any duplicate receipts made.
  5. Inform the credit card issuer of changes in address. Many card issuers allow consumers to complete change of address requests through their Website.
  6. Talk to others on a joint account, about how to avoid credit card fraud.
  7. Be careful with storing credit cards. People often steal cards in gym lockers, the workplace, and in unattended vehicles.


  1. Provide information over the phone unless you initiate a call to a trusted merchant. Check the companies phone number, address, and other information with the Better Business Bureau or other reliable sources.
  2. Provide credit card information to receive a prize, free vacation, or credit card over the phone. Instead, ask for a written application or notice and carefully check out the company before pursuing the offer.
  3. Throw away credit card account statements or personalized credit card offers that come in the mail. Instead, buy a personal shredder and destroy any mailed credit card offers, old card statements, expired cards, and receipts.
  4. Leave receipts in the store, ATM, or lying around in a purse or wallet where they could fall out. Place receipts in a secure location in the home until able to review.
  5. Provide credit card information to unsecured portals online. A sophisticated looking Website does not mean a company is legitimate. Check the encryption, avoid businesses that provide offers through unsolicited emails, and check their online reputation.

If you lose your cards or if you suspect fraud, take immediate action by notifying the card issuer. Banks and credit card companies often have 24-hour, toll-free numbers to handle such emergencies. Follow up the notification with a written letter sent by certified mail. If fraudulent charges show up on the account, send another letter to the card issuer disputing the charges. Filing a police report and can also be beneficial in stopping the fraud.

Whether or not you get all the money returned is a good question.  If you don’t, you may want to consider speaking with an insolvency trustee who can help you create a plan to deal potentially with this debt.