Dealing with Unauthorized Charges on Your Credit Cards

You’re out appliance shopping and spot the exact washer/dryer combo you’ve been looking for. You tap your card and it’s promptly declined. You tap it again but to no avail. Dismayed, you leave the store without the washer nor dryer – and no clue why your card was declined. Turns out someone stole your card information and went on a spending spree. 

There are many reasons why a credit or debit card could be declined. But credit card fraud – whether it’s identity thieves using your information to open a new credit card account in your name or stealing your credit card information linked to an existing account, is on the rise. In fact, in 2024 there were 458,538 cases reported to the Federal Trade Commission, up nearly 8% from the previous year.  

But there are effective and proactive ways you can limit the risk of unauthorized card use – and many steps to take if it happens to you. For these answers, we turned to Denise Keiser, AFC®, VP of Empowerment at BALANCE, our partner in providing financial education and counseling to ARAG legal plan members. Keiser offered her expertise and insights.

How can I help prevent someone from stealing my credit card info and/or charging things on my accounts?

Keiser states, “Monitoring your account is your first line of defense.” She notes that protecting yourself means staying proactive – and starting with these steps.

• Monitor your accounts regularly: Review your credit card transactions online or via mobile app at least once a week.
• Enable alerts: Set up text or email notifications for all transactions or those over a specific amount.
• Use strong, unique passwords: Especially for banking and financial apps, and update them regularly.
• Be cautious with your card information: Avoid sharing your card details over the phone, via text or on unsecure websites.
• Watch for skimmers: At ATMs or gas stations, check for signs of tampering on card readers.
• Avoid public Wi-Fi: When accessing financial information or making online purchases, use a secure network.

What are some reasons to dispute a credit card charge – from billing mistakes to fraud or unauthorized charges?

Keiser also says to keep in mind several reasons why unfamiliar charges could show up – and valid reasons to dispute them.

• Fraudulent charges or unauthorized use: If someone used your card without permission.
• Billing errors: Such as being charged twice for the same purchase or charged the wrong amount.
• Services not received or goods not delivered: If you paid for something that was never provided.
• Returned items not credited: If you returned a product and the refund wasn't processed.
• Canceled services or subscriptions: If you were charged after cancellation.
• Misleading or misrepresented purchases: If the product or service wasn’t as advertised.

If it happens, what steps do you take, who do you notify, etc., to dispute a charge?

Keiser advises, “When you spot a charge you don’t recognize, don’t panic – document it, report it and follow up.” Here are the steps to take if you notice an unauthorized or incorrect charge:

1. Contact the merchant first: Sometimes a quick resolution can happen directly with the seller.
2. Notify your credit card issuer immediately: Call the number on the back of your card or log in online to report the issue.
3. Document everything: Save receipts, screenshots, emails and notes from any conversations.
4. File a formal dispute: Most issuers allow you to submit a dispute online, by phone or in writing.
5. Follow up in writing (if needed): To preserve your rights under the Fair Credit Billing Act, you may need to submit a written dispute within 60 days of the billing error.

What happens after you file a credit card dispute? How/when do you follow up?

After you file a dispute, be prepared, as the investigation could take a few weeks – or more. And there can be many steps in the review process.

• Your card issuer investigates the charge. This usually involves contacting the merchant and reviewing any documentation.
• Provisional credit may be issued. You might not have to pay the disputed amount while the investigation is ongoing.
• The process can take up to two billing cycles, but usually resolves sooner.
• You’ll be notified of the outcome. If the charge is found valid, you’ll be responsible for paying it. If not, it will be removed permanently.
• Follow up if necessary. If you haven’t heard back within 30–45 days, check your dispute status online or call the issuer.

What rights do you have as a consumer that would protect you in these situations?

Keiser points out, “Consumers have powerful protections in place to help them resolve disputes fairly.” She notes that as a consumer, you are protected by several federal laws:

• The Fair Credit Billing Act (FCBA): Allows you to dispute billing errors and unauthorized charges within 60 days of receiving your statement. You are only liable for up to $50 in unauthorized charges – and most credit card companies waive even that.
• The Truth in Lending Act (TILA): Requires credit card issuers to provide clear information about your rights and responsibilities.
• Zero liability policies: Most card issuers provide zero liability for unauthorized charges made online or in-store.

While the efforts to steal your credit card info are becoming more prevalent – and more complex in their deceptive tactics, you still have the power and resources to take action and protect your financial well-being. As Keiser notes, “Credit card fraud can happen to anyone, but knowing your rights and taking swift action can minimize the impact.”