With more than 50 million credit cards in circulation and annual card-generated retail volumes of well over $168 billion, Canada truly is a nation that runs on plastic. In the past decade alone, the dollar volume of credit card purchases has more than tripled.

Yet there's a cautionary side to this astonishing growth. Economic activity on this scale is naturally going to draw its share of fraud artists. For the 12 months ended in June 2005, the Canadian card industry lost more than $201 million to fraud, says Gordon Jamieson, Visa Canada's head of risk management and security. He says credit card fraud has been showing steady growth since 2000, fuelled in particular by counterfeit card use and "card not present" activity - people using the phone or internet to make purchases using others' card numbers.

The good news? To date, the losses sustained because of credit card fraud are proportionately very small - amounting to less than one tenth of one per cent of all transactions.

As a business owner, you don't want your transactions to be included in this exclusive little statistical group. If you're like most companies, especially those in retail, the first place you'll look for evidence of fraud is in your dealings with customers. People who come through the door carrying counterfeit cards are simply the most obvious candidates to victimize your business.

But as a business owner/operator, you also have to be on guard for potential fraud arising from the commercial credit cards you and your staff may be carrying. As Jamieson cautions, it doesn't matter whether your company is a small, family-owned operation or a large sophisticated corporation. Anyone can be exposed to a fraud attempt. The first rule then, is to be aware of the potential. "This applies more to individual cardholders," says Jamieson, "but then again I've received emails through my own business email asking for credit card information. In a business, you never know who's going to receive this kind of email."

Armed with this level of awareness, business owners should follow the same common sense rules that apply to individual credit card holders. These include:

• Sign the back of your commercial card as soon as you receive it. Make sure the card is used only by authorized people in your company.
• Destroy any old cards to ensure the information they contain doesn't fall into the wrong hands.
• Destroy any unwanted cards to make sure others can't use them.
• Immediately report lost or stolen credit cards
• Have a list of all commercial cards and their numbers and keep it in a safe place. If by any chance your card or cards are lost, you'll need to refer to it in a hurry.
• Keep track of your cards at all times. Know who has them and what they're using them for. Statistically, there are more credit card thefts in the workplace than any other location.
• Equally important, don't leave a credit card in the glove compartment of a car. Again, statistics show that a high proportion of credit card thefts are from glove compartments.
• Review your monthly statements to make sure that all purchases were made on valid company business.
• When using your card, try to make sure it isn't being double swiped through a skimming device that can copy information encoded in the magnetic strip.
• If you have a PIN number attached to your business card, do not disclose it to anyone. No one has a valid reason for requesting your PIN number.
• When your card is returned to you after you've used it, make sure it's the correct card.
• Shred unwanted credit card offers, credit card receipts, ATM receipts and bank or credit card statements before you dispose of them.
• If you use your card online, make sure there's a padlock icon on your browser status bar. This ensures that your information will remain secure during the transaction.

In addition to these basic measures, Jamieson has two other key tips that he likes to reinforce. One is that he encourages companies to have a system or process in place to ensure that commercial credit card statements are verified. "I know with our own corporate cards we review our statements on a monthly basis and then we send it to our finance department for approval and payments," he says. "The onus is put on the individual to ensure that all transactions are correct." The second tip is to be on guard for unsolicited attempts to obtain your credit card information, whether by phone or email. "Do not give out your information if somebody asks for it because they can take that account information and use it over the internet or in some card-not-present manner to perpetrate a fraud," Jamieson says.

Importantly, commercial cardholders should also realize that they aren't alone. Credit card issuers like the financial institutions that offer Visa cards have their own fraud detection systems in place to look for anomalies in purchase patterns that could signal potential fraud. When unusual purchase patterns take place, the cardholder is immediately alerted. In cases where cards have been used fraudulently, issuers will conduct an investigation. "If the customer is deemed to not have been involved in any way, they will be reimbursed for any of these charges," Jamieson says.

Advances in credit card security are also helping. Issuers have introduced PIN numbers and card verification values, the three digit numeric value written on the back of a card. Someone who obtains your company's card information off a receipt, for example, wouldn't have these security codes and therefore won't be able to use it.

Soon, commercial card users will have added security with the next generation of CHIP or microprocessor enabled cards. By 2010, card swiping will become obsolete as users dip their CHIP-enabled cards into special readers and then use a PIN number to verify that they are the true and rightful owners of the card. As Jamieson says, no security system is totally foolproof, "but [CHIP and other programs] raise the bar. They make it more difficult for people to commit fraud."