Credit Card Fraud Protection in Canada: How You're Covered

Canadian credit card holders enjoy some of the strongest fraud protection in the world, zero liability, chargebacks, and EMV chip security explained.

Zero Liability, Canada's Core Fraud Protection

All major Canadian credit cards issued on the Visa, Mastercard, and American Express networks carry a zero liability policy. This means if your card is used fraudulently, whether stolen, skimmed, or used in an unauthorized online transaction, you are not responsible for those charges. The bank absorbs the loss, provided you report the fraud promptly and weren't negligent (e.g., sharing your PIN).

Zero liability is a network-level guarantee, meaning it applies regardless of which bank issued your card. Debit cards through Interac also have zero liability protection in Canada, though the process for recovering funds can be slower.

Chargeback Rights in Canada

Beyond fraud, Canadian credit card holders have chargeback rights, the ability to dispute a charge and have your bank reverse it. Chargebacks apply when:

• You didn't receive goods or services you paid for
• A merchant charged you the wrong amount
• A subscription continued billing after you cancelled
• You received damaged or significantly different goods
• A merchant went bankrupt before delivering your order

Chargebacks are a powerful consumer protection tool. Debit cards have much weaker chargeback rights, another key advantage of paying with credit.

How Canadian Credit Card Security Works

Security Feature	How It Protects You
EMV Chip	Encrypted chip makes cards nearly impossible to clone at point of sale
PIN Verification	Requires your 4-digit PIN for in-person transactions
Contactless Limits	Tap payments capped at $250 in Canada without PIN
3D Secure (online)	Extra verification step for online purchases (Verified by Visa, Mastercard SecureCode)
Real-time alerts	Instant push notifications for every transaction
Fraud monitoring	AI systems flag unusual spending patterns and block suspicious transactions

What to Do If Your Card Is Compromised

• Step 1: Call the number on the back of your card immediately, banks have 24/7 fraud lines.
• Step 2: Report all unauthorized transactions, even small ones (fraudsters often test with small charges first).
• Step 3: Request a new card number, your bank will issue a replacement card within 3 to 5 business days.
• Step 4: Review recent statements for any other suspicious activity.
• Step 5: Update any automatic payments linked to your old card number.
• Step 6: Consider placing a fraud alert with Equifax or TransUnion.

Common Credit Card Fraud Types in Canada

• Card skimming: Hidden devices at ATMs or gas stations capture card data.
• Phishing: Fake emails or websites trick you into entering card details.
• Card-not-present fraud: Stolen card numbers used for online purchases.
• Account takeover: Fraudsters use personal info to access and take over your account.
• Friendly fraud: Someone you know makes unauthorized charges (family member, etc.).

Tips to Prevent Credit Card Fraud in Canada

• Enable real-time transaction alerts on your banking app.
• Never share your PIN, not even with bank employees.
• Cover the PIN pad when entering your PIN.
• Review your statement monthly for unfamiliar charges.
• Use virtual card numbers for online shopping where available.
• Shop only on HTTPS websites, look for the padlock icon.
• Freeze your credit with Equifax and TransUnion if you're not applying for new credit.

KOHO Fraud Protection

KOHO's prepaid Visa includes the same Visa zero liability fraud protection as a standard credit card. Because KOHO is prepaid, fraudulent transactions are limited to your loaded balance, meaning there's no risk of a fraudster running up a large credit bill in your name. Real-time spending notifications alert you to every transaction the moment it happens.