What to Do About Unauthorized Credit Card Charges
You are protected if you act quickly
Unauthorized credit card charges can be scary and a hassle, but you won’t have to pay for these charges if you find and report them as soon as you notice them. To spot unauthorized charges, you have to pay close attention to every transaction on your credit card statement, no matter how big or small. You can catch unauthorized charges more quickly by monitoring your transactions online throughout the month rather than waiting for your billing statement to arrive in the mail.
Detect Unauthorized Credit Card Charges Early
Unauthorized credit card charges include any type of charge to your account for which you didn’t give permission. Often, unauthorized charges result from credit card theft—either from a stolen credit card or a compromised card number. Sometimes, unauthorized charges result from clerical error or a computer glitch. Either way, it’s your responsibility to find and report these charges as quickly as possible to minimize your liability for charges you didn't make.
Before reporting charges to your credit card issuer, make sure the chargers weren't made by a joint account holder or authorized user on your account.
Many unauthorized credit card charges go unnoticed for several months because cardholders don’t thoroughly review their credit card statements. But early detection is crucial when it comes to correcting unauthorized charges. You could be liable for the charges if too much time passes from the time the charge is made to the time you report it. Specifically, the Fair Credit Billing Act says that you should report unauthorized charges and other credit card billing errors to your card issuer within 60 days of the date the statement containing the error was mailed.
For example, if an unauthorized charge was made on February 15 and your statement was mailed on March 1, you have until April 29 to dispute the charge in writing. The credit card issuer isn’t legally required to handle your dispute favorably if you report after 60 days.
Reporting Unauthorized Credit Card Charges
When you spot an unauthorized charge on your account, call your credit card issuer using the number on the back of your card. If you don’t have your credit card and you haven’t saved a copy of the phone number, use a recent billing statement or the card issuer’s website to find the correct number.
Never give information to someone who calls or emails you claiming to be your credit card issuer, no matter how legitimate it seems. This is often a phishing scam that thieves use to get access to your personal or credit card information. Often the scam is used to gain access to the three-digit security code on the back of your credit card or your billing zip code. Always initiate contact with your credit card issuer using a trusted phone number from your credit card, billing statement, or the credit card issuer's real website.
Once you have the correct number for your credit card issuer, call to report the unauthorized charges. They’ll typically cancel the compromised account and reissue a new credit card with a new account number.
Report all unauthorized charges to your credit card issuer, no matter the amount. In one particular type of credit card scam, thieves will make a small charge to your account, only $1 or so, and then follow up with a much larger charge. The small charge is typically just a test to see if the account is active and that the larger charge will go through.
To further ensure that your rights are protected, you should follow up with a dispute letter that explains the unauthorized credit card charges. Reference your phone call and include the name of the customer service representative with whom you spoke.
Some credit card issuers require you to first try to resolve the unauthorized charge with the merchant. You can typically identify the merchant by reviewing your credit card statement. However, thieves sometimes spoof merchant information, making it appear as though charges were made with a particular merchant when they really weren’t (this has been an ongoing issue with some unauthorized iTunes charges). In this case, you’ll have to resolve through your credit card issuer rather than with the merchant.
Protect Your Rights
By law, you can be liable for up to $50 of unauthorized charges made before you reported a missing credit card, but many credit card issuers have zero fraud liability policies that remove your liability for fraudulent charges. In addition, the Fair Credit Billing Act says that you’ll never be liable for unauthorized charges made while your card was in your possession. In other words, if the unauthorized charges were made with your credit card account information rather than your credit card, you won’t be held liable as long as you still have physical possession of your card.
Once you dispute an unauthorized charge, the credit card issuer will typically remove it from your account. In the meantime, you’re not responsible for paying the disputed portion of your balance. The card issuer can’t charge any fees or interest on that unpaid balance unless it’s later determined that you indeed authorized the charge.
To deal with unauthorized charges on your account:
- Check your account regularly to catch unauthorized transactions as quickly as possible.
- Report unauthorized charges as soon as you notice them—either to the merchant or your credit card issuer.
- Follow up the dispute with a letter to your credit card issuer to ensure your rights are fully protected.
- Take steps to protect your credit card information to prevent future unauthorized charges.
Federal Trade Commission. "Disputing Credit Card Charges." Accessed March 30, 2020.
Federal Deposit Insurance Corporation. "Consumer Protection Topics - Billing Errors and Resolution." Accessed March 30, 2020.
Federal Trade Commission. "How to Recognize and Avoid Phishing Scams." Accessed March 30, 2020.
Discover. "How Does Discover Handle Fraud?" Accessed March 30, 2020.
Capital One. "I Have a Problem With a Charge On My Credit Card." Accessed March 30, 2020.
Apple Inc. "Identify Legitimate Emails From the App Store or iTunes Store." Accessed March 30, 2020.
Wells Fargo. "Zero Liability Protection." Accessed March 30, 2020.
Federal Trade Commission. "Lost or Stolen Credit, ATM, and Debit Cards." Accessed March 30, 2020.