Industry Canada   Industrie Canada

Consumer Advisory: Credit Card Telemarketing Fraud

Adapted from information from the Consumer Policy Branch of Industry  
Canada as of March, 1995.

To get copies of the full bulletin, showing a comparison of credit card 
rates, in your region, contact:

Atlantic  Tanya Nadeau  (902) 426-4778
Quebec  Claire Courtois  (514) 283-7689
Ontario  Irene Meek  (416) 973-5040
Prairies  Lydia Shevchuk  (204) 983-2826
British Columbia  Nicola Fletcher  (604) 666-1404

Information: David Waite (819) 953-3383

(Version francaise disponible)  

25146 E 95-03

Credit Card Telemarketing Fraud

Every year, many Canadian consumers become victims of telemarketing 
fraud. Often the fraud involves the use of credit cards.

If we are unaware of this type of fraud, we can be talked into giving 
out our credit card numbers over the telephone despite our better 
judgement. The numbers are then used to make unauthorized charges on our 
credit card accounts.

The direct marketing industry in Canada provides valuable service to 
large numbers of consumers. However, consumers should always be on the 
look-out for persons who may not be legitimate direct marketers.

Here are some tips which will help consumers avoid becoming victims of 
telemarketing fraud involving credit cards:

--Don't give your credit card number, or any other card information 
(such as the expiry date) over the telephone unless you are sure you are 
dealing with a reputable organization. Don't give card information to an 
unsolicited caller no matter who he/she claims to represent.

--Check a reliable source of information, such as the Better Business 
Bureau, about the product or caller before committing yourself to 

--In many cases of telemarketing fraud, the caller will ask for money so 
that you can claim a prize. If the contest is legitimate, you should not 
have to send money or give your credit card number.

--Don't give information about your bank, especially your account 

--Don't give your social insurance number.

--Don't feel pressured into making decisions on the spot.

--Don't feel bad about hanging up!

--Remember that if a deal sounds too good to be true, it probably is!

Credit card fraud is not limited to telephone usage. Other safe credit 
card practices include:

--Sign the back of a new card right away and destroy unwanted cards.

--Make a list of cards and their numbers. This is important information 
when reporting lost or stolen cards.

--Never leave credit cards unattended, for example, at work or in a car.

--Protect your Personal Identification Number (PIN). Memorize it rather 
than writing it down.

--Always check that the card returned to you after a purchase is yours.

--Check monthly statements to make sure all the charges are accurate.

--When travelling, carry your cards with you or make sure they are in a 
safe place.

--Report lost or stolen cards immediately.

Credit Cards: Cards that provide revolving credit. Minimum monthly 
payments are required.
Charge cards: Cards requiring payment in full each month.
Fees: Charges such as transaction fees, administration fees or annual 
Interest/Penalty Rate: The nominal annual rate at which interest or 
penalty payments are calculated.
Grace Period: The number of days between the statement date and the 
payment due date.

The Bank of Canada rate is the rate at which banks can borrow money from 
the Central Bank. It is seen as an indicator of the direction of other 
short term rates, such as those for consumer loans.

Terms and Conditions

Remember these facts and save money:

Bank, Trust Company and Credit Union Cards

--Interest is charged daily. So, if you make payments between 
statements, you save money.

--Interest is charged on cash advances from the day you borrow until 
they are paid in full. 

--Interest is not charged on purchases showing up on your statement for 
the first time if the entire statement balance is paid by the due date.

And don't forget:

--When the balance is not paid in full by the due date, interest is 
charged on the daily balance from the date purchases have been posted to 

the account until it is paid in full. 

Other Credit Cards

In most cases you pay less interest if you pay off at least half the 
balance each month. Retail stores (except in Quebec), subtract payments 
equal to 50% or more of the balance from the balance on the statement 
before charging interest. In Quebec, interest is calculated daily so in 
that province, you save money if you make payments between statements.

--Interest is compounded, so if you miss a payment, the next month you 
will pay interest on the balance plus interest. For example, at the 
current rate of 2.4% per month, one month's interest on $100.00 is 
$2.40. If no payment is made on this at all, the next month's interest 
will be charged on $102.40 and will amount to $2.47. 

Charge Cards

Irving Oil calculates penalties on the outstanding daily balance.

The American Express and Diners Club/enRoute account balances are due on 
receipt of statement. A delinquency assessment equal to 30% per annum is 
charged on unpaid balances. Cards are cancelled if balances remain