How to dispute credit card charges

According to a 2013 Nilson report, credit and debit card fraud were the cause of over $11.2 billion in losses in 2012. And if you think that sounds bad, just wait; it’s expected to get much worse.

As USA Today reported last year, hackers and scammers have turned stealing credit card numbers into an art form. By focusing on major retailers such as P.F. Chang’s, Target, and Home Depot, they can score thousands of credit card numbers in one fell swoop — numbers that are then packaged and resold for a profit.

And stolen credit card numbers aren’t as cheap as one might think; they often pull in big profits. According to Neal O’Farrell, founder of the non-profit Identity Theft Council, stolen numbers are often sold for $120.

With so much money to be made and lost, the stakes couldn’t be higher for retailers, merchants, and individuals. Even though card issuers and merchants incurred the vast majority of these losses in 2012, individual victims endured stress and fear as they figured out how to escape the situation with their credit and identity intact.

Sounds scary, doesn’t it? With credit and debit so prevalent for most of society, it certainly is. Fortunately, your liability is limited if you dispute fraudulent charges right away. Here is what you should do if you discover a fraudulent charge on your debit or credit card:

How to Report Fraudulent Debit Card Charges

Although debit cards are often seen as a convenient alternative to credit, they actually offer fewer protections compared to credit cards. According to the Federal Trade Commission, your liability for fraudulent charges on a debit card follows this schedule:

If you report fraudulent activity …

  • Before any charges are made: $0
  • Within two business days after you learn about the loss or theft: $50
  • More than two business days after you learn about the loss or theft, but less than 60 calendar days after your statement is sent to you: $500
  • More than 60 calendar days after your statement is sent to you: Unlimited liability

If you are someone who doesn’t watch your accounts closely, you could be on the hook for a pretty penny if someone steals your digits and starts making charges. And if you don’t notice anything funny going on after 60 days have passed, watch out; your account could be emptied with little to no recourse available to you.

Because of the extra liability that comes with using debit cards, you should always stay on top of your accounts to make sure that you are the only one making charges. The second you notice anything out of the ordinary, you should take these steps:

  • Contact your ATM or debit card issuer the second you notice any charges or withdrawals you didn’t make.
  • Write a follow-up letter to your bank or card issuer and send it certified mail.
  • Take notes of your actions, including dates and contact information for any bank representative you have spoken to.
  • Follow up with your bank until the issue is resolved.

How to Report Fraudulent Credit Card Charges

You should dispute fraudulent credit card charges in the exact same manner as you would debit card charges. Contact your card issuer immediately, send a certified letter to follow up, and take notes of all of your communications.

The good news is, the stakes aren’t quite as high when someone uses your credit card or credit card number without your consent. According to the Federal Trade Commission (FTC), liability for unauthorized use of your credit card tops out at $50. And if your card number is stolen but not your actual card, your liability is zero. In most cases, your card issuer will simply cancel your account and reissue you a card with a new number.

Preventing Credit or Debit Card Theft

Obviously, the best case scenario is one where credit and debit card fraud are prevented altogether. According to the FTC, there are plenty of moves you can make that will limit your exposure to theft and fraud — or at least help you discover it as quickly as possible. Here are the FTC’s suggestions when it comes to protecting your data:

  • Don’t share your account number over the phone (unless you are on a call you initiated).
  • Keep your account information private. Never leave your private information where anyone else might see it.
  • Keep a record of all of your accounts. In the case of theft, it is helpful to have a record of your account numbers and telephone numbers of each card issuer.
  • Keep your eye on your card while transactions take place. Don’t let your card out of your sight if you can help it.
  • Cut up old cards and destroy your account numbers in the process.
  • Don’t sign blank receipts.
  • Check your monthly statements for fraudulent activity frequently. If you bank online, make an effort to check every few days or at least once a week.
  • Keep your PIN number private. When using debit, never write your PIN number on a receipt or where anyone can see it.

Disputing Other Types of Charges

The Fair Credit Billing Act (FCBA) makes it possible for consumers to dispute other types of charges in addition to out-and-out fraud. Referred to as “billing errors,” these types of charges can include the following:

  • charges that list the wrong date or amount
  • charges for goods and services you didn’t accept or that weren’t delivered as agreed
  • returns that were never credited
  • charges that were never received due to failure of the creditor to send a bill to the appropriate billing address

Also, according to the FTC, you should write to your creditor at the address they list for billing errors as soon as an error is noticed. Include your account numbers and details on any disputed charges, send your letter via certified mail, and keep a copy for your records. By law, your creditor must acknowledge your complaint within 30 days after receiving it. In the meantime, you can lawfully withhold payment on the charges you are disputing.

Disputing fraudulent credit or debit charges can be a huge hassle, but it is much easier to recover if you notice the fraud immediately and take the appropriate steps to report it right away. With identity theft and credit card fraud becoming so prevalent, simply being aware of what is going on with your accounts is one of the best weapons you have.

Have you ever disputed a fraudulent credit or debit card transaction? What was the outcome?


More about...Banking, Credit

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others

There are 13 comments to "How to dispute credit card charges".

  1. Beth says 04 March 2015 at 04:43

    I almost didn’t read this article because of the title but I’m glad I did! I wonder how many people know their liability? Pardon me while I go Google what the rates are in Canada… 😉

    I tend to keep a close eye on my accounts because a couple of friends have had their debit card numbers stolen and money swiped from their accounts. It’s troubling.

  2. BE Pennypacker says 04 March 2015 at 06:22

    Last time my credit card number was stolen, the perp ran up $1000 on two separate occasions at 7-Eleven. The credit card company called me about the first one right away, removed the charge, and issued me a new card. It was fast and easy. For some reason, the second charge was more difficult to remove. They didn’t catch it right away and I ended up calling them about it. In this case, the charge remained in “disputed” status for two months before the company finally removed it from my balance. I had to go through two billing cycles of paying my balance minus the “disputed” amount. I still wonder how many Big Gulps the guy must have bought with $1000 🙂

  3. Kalie says 04 March 2015 at 06:45

    We once disputed a charge and I was surprised at how quickly and effectively our bank handled it. The charge wasn’t fraudulent but was a store error. It is so important to check your statements. My husband is the one who does this and I’m so glad he does. Not only does it help track your spending, you can make sure other people aren’t spending your money!

  4. Jeff says 04 March 2015 at 07:44

    My Mom fell for an e-mail fishing scam and they took a good chunk out of her bank account. The bank caught it quickly though and gave her all the money back with no hassle. They did though still charge her the $1.50 fee for the fraudulent e-mail money transfer. She paid that calling it a small price to learn not to fall for e-mails like that.

  5. Rail says 04 March 2015 at 08:30

    I sometimes use a credit card for travel purposes like vacations (hotel, fuel, food etc.) or if a purchase is over the internet. Other wise I use “money”. Its so cool to use money. Its accepted every place I go and the only scam that can affect it is Armed Robbery.
    In all seriousness this article just shows another drawback of CC purchases, even though I do realize that it is almost impossible to do some things without one any more and they can be handy for many situations. I’m still in the Ramsey camp on this subject, though. Cash is king. Cheers!

  6. Beard Better says 04 March 2015 at 08:51

    This is definitely an informative article, but I think it missed one really important point with regards to debit card protections. While it is true that you can dispute charges, with a debit card, that means that your money is held up for the time it takes to investigate. This could be less than a day, or it could be several weeks. If you needed that money for rent or bills, you are just out of luck until the bank is satisfied that it really was a case of fraud.

    Credit card disputes are generally resolved in much less time, and even if the investigation takes a long time it isn’t your money being held up. I have not ever used a debit card to pay for things, and really cannot understand why anyone would want to use them instead of credit cards. Between the better protections and better rewards offered by credit cards, I don’t see any upside to using a debit card.

    • Chelsea @ Broke Girl Gets Rich says 04 March 2015 at 15:20

      This is one of the big reasons I’ve stopped purchasing things on a debit card and use credit cards for everything.

      I have to hand it to credit card companies… their customer service when dealing with fraudulent charges is pretty incredible. I had two instances that really stood out to me when a credit card company wouldn’t have had to refund my charges, but they did:

      1-I paid a school fee on a credit card, and for some reason they ran it as a cash advance instead of a simple fee. I had no idea they were running it as a cash advance, so when I called the credit card company and asked if I should get the school to refund my money and charge me the proper way, they simply removed the cash advance charge from my bill without me having to do any of that headache work.

      2-I bought a plane ticket from a vendor who was online and selling US-based tickets in US Dollars, but was apparently actually charging the bill in Indian Rupees. When I saw my bill had a foreign transaction fee, I called the credit card company to see what was up. I told them that to my knowledge, the transaction happened in US Dollars, so there shouldn’t have been a fee. They refunded the charge even before they did an investigation and told me that even if the charge should have been there, I wouldn’t be charged the fee in that instance.

      I can’t even imagine how long it would have taken to get my money back from a bank if I had these issues, but the service I saw pretty much made the case to never use anything other than a credit card to make a payment ever again.

  7. Abigail @ipickuppennies says 04 March 2015 at 09:28

    I guess we got very lucky. The one and only time someone was able to use our card information, Chase refunded us the whole amount.

    I can’t remember how long it had been before we noticed it. I know it was less than a week. Maybe only a couple of days?

    Point being, we weren’t charged anything, and the refund was processed in under a week.

    On the other hand, a Facebook friend had something similar happen with another bank. They told her it would take up to a month. Meanwhile, she and her husband had something like $50 left until payday, which was about a week later. Yikes!

  8. john s. says 04 March 2015 at 10:01

    My debit card has been breached at least 3 times. Once, the bank called to tell me that they discovered a few very small charges, not more than a dollar, which the bad guys apparently do to test the card. Bank changed my card and refunded the amounts. Second time, I was checking the balance (which I now do EVERY day) and found a $200+ charge from, which I have never used. Filed a written complaint with the bank, and they returned the money, pending an investigation, then notified me that the case had been closed and I was OK. Third time, I found that PayPal had paid someone in California $250 for something that I was supposed to have bought. Couldn’t find a human being at PayPal to complain to, but the bank did the same as before and I didn’t lose anything. I have also used this card at Target and Home Depot during the periods of their breaches but haven’t found anything awry yet, although that could be still down the road. I like the debit card for keeping track of daily expenses. We use it for all charges over $10. But I have since tightened up and no longer use it in a place like a restaurant, where it leaves my sight, or for Internet purchases. My bank, by the way, is KeyBank. I don’t love any big bank chains but they have been OK in times of trouble, like these.

  9. Adam says 04 March 2015 at 11:43

    Some of this should be mitigated when the switch to EMV in the US finally happens at the end of this year.

    One thing I’ve never know, perhaps someone can answer: what happens when you run your debit card as a credit card? Do debit liability laws apply, or credit?

  10. Laura says 04 March 2015 at 13:51

    Blessedly, I have never had to dispute a charge made on my debit card or personal credit card. My work credit cards, however, were a different story: I have several and one would get stolen, then once that was cleared up, another would be stolen. I finally figured out how the thieves were stealing them: they had hacked my work Amazon account and stole the stored credit card info. I am no longer a fan of storing my card info on vendor websites (but most of them, including Amazon, make it tough to opt out completely; you usually have to have one card listed). If you have an online account with a business, make sure your password is iron-clad.

    Contesting the charge was a huge hassle, even with the support of my place of employment. Bank of America was convinced I was trying to scam them, asking me repeatedly if I’d contacted the vendor (who’d skipped town), why I refused accepting the goods (I never received them), even why I placed the order with them in the first place. They warned me that they’d hear out the vendor completely to get their side of the story before deciding if this was something they should refund. Turned out they couldn’t reach the vendor either so were finally forced to admit it was a case of fraud and refunded the $150 to my company. I probably spent at least that much in salary and overhead trying to resolve that charge.

    And after getting card after card stolen until I figured out how it was being done, Accounts Payable audited me regularly for several years afterwards. Fortunately it hasn’t happened since and AP seems to finally be relenting.

  11. Balance Transfer Expert says 31 March 2015 at 08:16

    The introduction of EMV cards in the US should make it more difficult for the fraudsters. Chip and Pin as we call it has reduced card fraud in the UK altough not completly.

    A good credit card company should also be looking for suspicious transactions that a cardholder would not normally make.

    I have had a card cancelled and replaced in the past, before I even knew anything untoward had happened.

Leave a reply

Your email address will not be published. Required fields are marked*