Identity Theft vs. Credit Card Fraud

5 February 2015

Identity theft and credit card fraud are two of the scariest concepts for most modern adults. While Canadians should want to avoid both at all costs, it is important to know the differences between the two, and what each can mean for your personal financing and overall state of sanity and well-being.

According to the Royal Canadian Mounted Police, credit card fraud can happen in a number of ways, and in 2009 – when there were 69.7 million credit cards in circulation nationwide – approximately 541,580 were compromised, or about 0.77 percent. While it may not seem like a huge percentage, it is substantial considering the country only has about 35.5 million residents.

In contrast, the Canadian Anti-Fraud Centre (CAFC) noted that there were over 11,000 incidents of identity theft or fraud in 2009, totaling more than 10 million dollars in lost capital. According to reports, that is over one million dollars more than the reports from 2008. Since that time, the numbers have remained consistent, according to industry estimates.

While being a victim of either is less than ideal, the truth is that the credit card fraud is the lesser of the two evils, as it primarily impacts your credit purchasing, and with conversations to your creditors, most people are able to fix the problem before it gets too out of hand. However, identity theft is much more involved and can be responsible for a slew of problems. It impacts not only your personal finances, but also your credit report and your personal life.

With identity theft, a thief will steal personal information - Social Insurance Number, date of birth, names and/or addresses - and use that information for a multitude of crimes, such as applying for loans, jobs or health insurance plans, all through fraudulent means.

Credit card fraud, on the other hand, is when someone is able to access your credit card number and account information, which is possible via a stolen wallet or insecure internet access.

Here are a few things to keep in mind, when researching how to protect yourself from these issues:

Alerts: Most times, victims of credit card fraud are first alerted to the issue via their credit card company. These industries have entire units devoted to following their user’s activities to make sure that everything looks legitimate. However, identity theft victims sometimes don’t learn of the injustice until months or years down the line, after the damage has already been done. Look for a service that provides you with alerts and notifications when certain types of changes are detected in your credit file.

Recovery: With credit card fraud, the best thing you can do is alert your credit card company to the fact that certain purchases were not your doing, and they will work to resolve the fraudulent charges. If you have misplaced or lost a card or wallet, you should report the missing card to the creditor immediately. For identity theft victims, it can take years to right the wrongs of thieves. Generally, the process is very time consuming and tedious. Choose a service that has victim assistance to help you through the recovery process. If you suspect identity theft has occurred, the first thing to do is get a credit report, review it carefully and alert your creditors to activity that isn’t yours.

If you are looking for more ways to protect yourself from these types of issues, contact Identity Guard Canada today to learn how we can help.