Over the last decade, identity theft has been on the rise in Canada. In 2022, the Canadian Anti-Fraud Centre dealt with $530 million in losses from fraud and cybercrime, a 40% jump from $380 million in 2021.
Data breaches are increasing, too. According to a recent report by Surfshark, Canada has landed the 10th spot globally when it comes to breach count. Since 2004, there have been more than 207.4 million compromised accounts in the country.
Looking at these numbers, you would think Canadians have protections to safeguard their financial information, like freezing and locking their credit. But do they? Let's explore this further.
Canada does not have country-wide credit freezing or locking protection. As of now, the only place you can freeze or lock your credit in Canada is in the province of Quebec, where it's free and mandated by law.
The rest of Canada's provinces and territories don’t have legislation that requires credit bureaus to provide credit freezes or locks – and the bureaus have so far refused to put these protections in place voluntarily. In the absence of a lock option, the country's two main credit bureaus, Equifax and TransUnion, offer the following protective measures:
Unfortunately, these measures don’t provide the protection that Canadians need. Canada's consumer watchdog Marketplace tested Equifax and TransUnion’s credit monitoring services and found them unreliable and inconsistent.
The situation isn't any better with fraud alerts. Even though provincial legislation in Ontario, Manitoba, and New Brunswick requires lenders to put identity verification measures in place on accounts with fraud alerts, we’ve seen many reports of Canadians experiencing continued issues with fraudulently opened accounts even with fraud alerts in place.
Clearly, the rest of Canada is at the mercy of a flawed system, and Canadian legislation surrounding credit protection lags behind the US.
Credit freezes in Quebec are brand new. Thanks to the Credit Assessment Agents Act (Bill 53) that came into effect on February 1, 2023, Quebec residents can now freeze their credit with both TransUnion and Equifax at no cost.
A credit freeze allows consumers to block access to their credit information for specific purposes. When you have a credit freeze in place in Quebec, it means that:
Keep in mind, though, that even with a credit freeze, companies may still access your credit information for other legitimate purposes. They simply can’t use your credit report to open new accounts on your behalf.
If you do want to open an account, you simply need to unfreeze your credit temporarily – just remember to freeze it again when you’re done! We think that the mild inconvenience of having to unlock and then re-lock your credit is worth it to prevent the enormous hassle of fraudulent accounts being opened on your behalf.
It’s also important to note that, unlike the US, there is no distinction between credit locks and freezes in Quebec. Whether referred to as a credit freeze or a credit lock, they both enforce the security freeze rights set by legislation.
To freeze your credit in Quebec, you need to contact Equifax and TransUnion separately. The good news is that both companies offer online options to freeze, temporarily lift, or remove the credit freeze.
To implement a TransUnion credit freeze, you can take the following routes:
Putting an Equifax credit freeze in place is quite similar. Take a look.
Overall, Canada falls short when it comes to credit protection. Hopefully, in the coming years, we’ll see legislation implemented that puts Canadians outside Québec on a more secure footing.