Protecting Yourself from Unauthorized Transactions
If your credit card or your credit card account number falls into
the wrong hands, you may suffer a great deal of inconvenience and
possible financial loss. Here are some simple ways to protect yourself:
- As soon as you receive a new credit card, sign the back. Cancel
and destroy any cards you no longer need.
- Make sure your monthly credit card statement lists only the
transactions you made during the month. If you notice any unauthorized
transactions, report them immediately to your credit card issuer.
- Don't give personal information or your credit card account
number over the phone or the Internet unless you're dealing with
a company you know and trust.
- Keep your personal information safe. This includes your date
of birth, your social insurance number (SIN) and all your other
personal identification.
- Request your credit file from the credit bureaus at least once
a year to make sure it's accurate.
- Keep any record of your personal identification number (PIN)
separate from your credit card and never disclose it to anyone.
What to Do If You Find Unauthorized Transactions on Your Account
If you find unauthorized transactions on your credit card account,
follow these steps to find out whether you can be reimbursed:
- Contact your credit card issuer immediately and report
the unauthorized transactions. Also inform your local police.
- Check your credit card agreement. By law, your agreement
must explain your maximum liability (usually $50) in the case
of lost or stolen credit cards, or the unauthorized use of your
credit card account number.
- Find out if your credit card issuer has what is known
as a "zero-liability policy" on unauthorized transactions.
Visa, MasterCard and American Express cardholders are protected
beyond the maximum liability found in their credit card agreements.
This is done through a public commitment that Visa, MasterCard
and American Express call the "zero-liability policy". If your
credit card is lost or stolen, or if someone uses your account
number to make transactions you didn't authorize, you can usually
be reimbursed.
The zero-liability policy applies to transactions made on the Internet,
by phone or at retailers. However, it may exclude personal identification
number (PIN)-based transactions — for example, a cash
advance made with your card at an automated banking machine
(ABM). It may also exclude transactions made with convenience
cheques, or transactions made on corporate credit cards.
Find out from your credit card issuers whether they have such a
policy and how you can be protected. This type of policy is not
usually listed in a credit card agreement, since it is a public
commitment and not a legal requirement.
To sum up, having a good credit history is essential for many of
the things you'll need and want to do — buy a car, own a home,
take a vacation. By following the basic precautions, you'll have
a better chance of having access to credit when you need it.
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