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 anything. --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 number. --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. Definitions 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 fees. 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 unpaid.