What Do I Do When I See an Unauthorized Transaction on My Account?

Image shows a woman on the phone looking distressed. Text reads: "Steps to take when you see an unauthorized transaction on your account: contact your back, contact the vendor, dispute any charge with your bank or credit card company; file a fraud or police report; switch your bank drafts to your new account or card; monitor your account and credit closely"

Image by Ashley Nicole DeLeon © The Balance 2020

If you keep tabs on your bank account and check your transactions regularly, you may one day see signs of an unauthorized transaction on your debit card. Usually, this means that someone has stolen your debit card or they have somehow skimmed the number and have access to your checking account.

It is important to act quickly to protect yourself and to stop any further unauthorized charges. Follow these six steps if you find an unauthorized charge on your account. 

Contact Your Bank

First, immediately contact your bank and report an unauthorized charge. If you do this by phone, you should also follow up with a written letter (and keep a copy for your files). Always report fraudulent charges to your bank as soon as you know about them.

When you call, the bank should be able to tell you if the transaction was from a debit card or if it was an ACH (or electronic) transaction. If it was a debit card or point of sale transaction, you'll want to cancel your card and have it replaced. If it was an ACH transaction, you may need to close the account to prevent further access to your money.

Your bank can cancel a debit card over the phone, but you may need to go to a physical branch to close your account.

Your bank has 10 business days from the time you notify them to investigate the problem. In the meantime, ask your bank to put a temporary freeze on the account so no further charges accrue while you resolve the issue.

Contact the Vendor

Next, contact the merchant to begin the process of disputing the charge. Some vendors may work with you to press fraud charges and to generate a report that you can file with the police.

If the charges have already posted to your account, you may have to wait several days for the dispute to go through and have the money credited to your account. If you check your transactions on a daily basis, you may be able to catch the charge while it is still pending. 

Dispute the Charge With Your Bank or Credit Card Company

Oftentimes, you can dispute a charge with your bank or credit card company by filling out a form online and providing some information about the fraudulent charge. You may also have to go into your bank and physically fill out a dispute form. 

You have 60 days to dispute the charge formally. Still, it is important to act as quickly as you can, especially if you need the money that was taken out of your account. This is one reason why it is so important to balance your account to your bank statement on a regular basis. You can do this monthly or weekly. 

File a Fraud or Police Report

Depending on the number of charges made and the severity of the situation, you may choose to file a fraud report with your local police department. Be sure to keep a copy of the police report on file in case you need it in the future. 

Another alternative is to file an Identity Theft Report with the Federal Trade Commission (FTC) at IdentityTheft.gov. Using this method, you can skip filing a report with the local police, because the FTC is a federal law enforcement agency. They'll help you by creating a personal recovery plan. They'll also give you pre-filled letters you can send to your bank or affected merchant, and an official report you can use to clear your account.

Switch Your Bank Drafts to Your New Account or Card

If you close your account as a result of the fraudulent charges, you'll need to update all your regular bank drafts to reflect your new account information.

These include things such gym memberships, streaming services, and your household bills.

To streamline this process, it's helpful to keep a list of the automatic charges on your debit card so you can change them right away when something goes wrong. Otherwise, you'll have to deal with charges bouncing back, services being canceled, or bills going unpaid.

Monitor Your Account and Credit Closely

Finally, you need to continue to monitor your account and your credit report closely. Remember, it is important to put a stop to any fraudulent charges before the situation escalates to full-blown identity theft.

Be sure to check your credit report every four months, and check on your checking account as frequently as possible—even daily—to monitor for any additional fraudulent charges. If your bank offers alerts, you can sign up for them; they'll help you keep tabs on your accounts.

Take care when shopping online and be vigilant for credit card skimmers at ATMs and vending machines. Protect yourself from phishing scams and don't give your account information to anyone unless you initiated the contact. Finally, keep your wallet safe and shred documents that contain your account information when you don't need them anymore. 

If the thief had direct access to your checking account and not just your debit card, you may want to put a temporary freeze on your credit report to add an extra layer of protection against identity theft.

It can be frustrating when you find out that your information was compromised, but it makes it that much more important to monitor your information in the future.

Frequently Asked Questions (FAQs)

How long do I have to report an unauthorized transaction?

Legally, you have 60 days to report an unauthorized transaction to your financial institution.

How soon can I get a refund for an unauthorized debit transaction?

Your bank must respond to your report within 10 business days, and then it may take a few days to review your request and refund the money to your account.