Unauthorized credit card charges can be a pain, but thankfully 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. You can find these charges quicker by viewing your transactions online periodically throughout the month.
Detect Unauthorized Credit Card Charges Early
Unauthorized credit card charges are any type of charge to your credit card account that you didn’t give permission for. Often, unauthorized charges result from credit card theft. Sometimes, unauthorized charges result from clerical error or computer glitch. Either way, it’s your responsibility to find and report these charges as quickly as possible. Before reporting charges, make sure the chargers weren't made by a joint account holder or authorized user on your account.
In one particular type of credit card scam, thieves make a small charge to your account, e.g. $1, 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. It’s important to report even the smallest unauthorized charges.
Many unauthorized credit card charges go unnoticed for several months because cardholders don’t thoroughly review their credit card statements. Early detection is crucial when it comes to correcting unauthorized credit card 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 credit card issuer within 60 days that 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 30 to dispute the charge in writing. The credit card issuer isn’t legally required to handle your dispute favorably if you report after that time.
Report the Unauthorized Charge
When you spot an unauthorized credit card charge, give a call to your credit card issuer using the number on the back of your credit 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 your 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 credit card information, usually the three-digit security code or your zip code. Always initiate contact with your credit card issuer using a trusted phone number, e.g. from your credit card or statement. (See Recognize Credit Card Phone Scams.)
Once you have the correct number for your credit card issuer, call to report the unauthorized credit card charges. They’ll typically cancel the compromised credit card number and reissue another credit card with a new account number.
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 agent you spoke with.
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 information rather than with the merchant.
Protect Your Rights
The law says 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 removes your liability for many fraudulent charges. In addition, the FCBA 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.
Once you dispute the 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 summarize: report unauthorized charges as soon as you notice them either to the merchant or your credit card issuer. Then, follow up the charge dispute with a letter to your credit card issuer to ensure your rights are fully protected.