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What you need to know about identity theft, identity fraud

By Vanessa Page

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Identity fraud and identity theft are rampant in Canada. There are tens of thousands of cases reported each year, and millions of dollars lost. Though you are often not liable for fraudulent credit card charges, you should know how to be proactive in protecting your account info, how to spot suspicious transactions and what to do if you are a victim.

Equifax handled 50,000 cases of identity fraud in Canada in 2015 and is expecting higher numbers for 2016, says Equifax Canada's John Russo, vice president, legal counsel and chief privacy offer.


A survey by Chartered Professional Accountants Canada found that 75 per cent of people are more concerned about fraud in 2016 than they were five years prior. A third of respondents said they had been a victim of identity fraud. Of those victims, 65 per cent reported they had been the victim of credit card fraud and 31 per cent reported being a victim of debit card fraud.

Take steps now to reduce fraud risk
To avoid having your identity compromised, Mike Morley, an accountant and business author, says you must stay informed about your financial information. He suggests regularly checking your financial accounts and credit report for red flags, keeping your passwords private and ensuring that you receive all of your mail.

"It's a world where people are opportunists and they will grab an opportunity, so don't give them an opportunity," says Morley.

How to spot signs of fraud
One red flag to watch for is small withdrawals on a credit card, Morley says. Thieves will sometimes withdraw a small amount to test whether or not the transaction goes through. If the transaction is successful, the thief knows he has a working credit card he can use for larger purchases.

Russo recommends going one step further. He suggests paying for credit monitoring, which provides real-time alerts of suspicious credit applications or address changes made to your credit record. Both could be evidence that someone is using your identity. In Canada, there are two credit monitoring bureaus, Equifax and TransUnion, which offer credit monitoring starting at $16.95 per month.

If you don't want to pay for credit monitoring services, it's imperative to check your credit reports, bank statements, credit card statements and other financial accounts for suspicious activity.

What to do if you are a victim
In the event you do fall victim to identity fraud, be prepared for a tedious recovery process. Russo says restoring your finances to their original, pre-fraud state can take up to one year, depending on the fraud's severity. In less severe cases, a victim of credit or debit card fraud could have his finances restored in as little as 30 days.

If you find your identity has been stolen, the Royal Canadian Mounted Police (RCMP) and Russo suggest that you contact:

1. Your local police department or RCMP detachment to file a report. This will include an affidavit swearing you have had your identity compromised.

2. Your bank and credit card companies. Ask them to close your affected accounts and have them put a note in your file that you've been a victim of identity fraud. Contact any other companies, such as utility or telecommunication providers, if you suspect the thief compromised those accounts.

3. Credit bureaus Equifax and TransUnion. Ask them to place a fraud alert on your credit report. If your credit report has been negatively affected, you'll need to provide the bureaus with letters of clearance from your creditors in order to remove the damaging entries. The Canadian Identity Theft Support Centre website has sample letters to send to your creditors to request a letter of clearance.

4. ID-issuing government bodies. If your ID cards were stolen, Service Canada will issue a new Social Insurance Number (SIN). Provincial registry offices can re-issue driver's licenses and health cards. Always alert the credit bureaus if you have lost or had your SIN card stolen so they can remove the number from your file. Consumers who have lost or had their SIN cards stolen can sign up for SafeScan, a service that alerts banks that a SIN has been compromised.

5. Canada Post if you suspect your mail has been stolen. Canada Post can verify whether or not your mail has been re-routed to another address.

6. The Canadian Anti-Fraud Centre (CAFC). While not a legal requirement, the CAFC keeps track of reported identity fraud and theft incidents throughout the country and alerts the public to new or common scams.

Throughout the fraud recovery process, keep a record of phone calls, conversations and documents that might serve as proof of your innocence, and check your credit report monthly to track your progress, says Russo.

"Stay calm and talk to the experts," he says. "Just remain patient and things in the long run, as painful as they may be, will work out."

After you've restored your finances, stay vigilant and up-to-date on current scams. Russo recommends both the CAFC and the Financial Consumer Agency of Canada (FCAC) as places to learn about ways to reduce your risk of fraud.

See related: Credit file alerts add a layer of protection, 5 times you're on the hook for payment fraud

Updated: December 7, 2016