Call First, Then Check What You Owe
Start with a phone call. Contact your card issuer as soon as you suspect unauthorized use. Ask them to cancel the card and send a replacement before more transactions post. If you also use a debit card, consider changing your debit PIN.
Even a small charge deserves a call. The CFPB notes that thieves may make a small test charge first and come back for larger ones. Fraudulent charges can also show up months after your information was stolen. Look for merchant names you do not know, especially merchants outside your area.
Your liability depends on how the fraud happened, and the CFPB explains the rules this way. If you report a lost or stolen card before anyone uses it, you cannot be held responsible for unauthorized charges. If someone uses the card before you report it, the most you will owe is $50. Many cardholder agreements say you owe nothing in that situation. If someone steals your account number but not your physical card, you generally have no liability for the unauthorized use.
Send a Written Billing Error Notice Within 60 Days
A phone call alone is not enough to protect your dispute rights. The CFPB says you must send a written billing error notice. It must reach the card company within 60 calendar days after the charge appeared on your statement. Check the statement date, not just the day you noticed the problem, and send the letter well before the window closes.
Once the company receives your notice, it has 30 days to send a letter confirming it got your dispute. The one exception is if it has already finished resolving the error within that time. For help drafting the letter, the FTC offers a sample dispute letter. Keep a copy and note the date you sent it.
Keep Records and Know What Happens Next
Keep one file for everything. Put in copies of letters, replies and statements. Write down the date of each follow-up call and who you spoke with. A simple log makes a slow investigation much easier to track.
You can dispute a charge even if you already paid it. You probably will not get the money back until the company decides in your favor. The CFPB does not say how long that takes, so do not assume a refund is coming soon.
If the company agrees you are right, it must remove the charge from your bill. If it decides the charge is correct, it must explain why in writing. That letter must also state how much you owe and give the payment due date.
If the Dispute Is Denied, and Other Questions to Ask
Read your cardholder agreement. It describes your rights on unauthorized charges. You can get it from the card company's website or from the CFPB's Credit Card Agreement Database. Then run through these questions:
- Was the card reported lost or stolen before it was used?
- Was the charge on my statement more than 60 days ago?
- Have I sent a written notice, and do I have copies and call dates?
- Does the charge involve defective goods or services? A different process may apply.
The sources I reviewed do not explain what to do if the company rejects your dispute. If that happens, ask the company to walk you through its reasoning, and check the CFPB website for its current complaint options. Debit cards are also only briefly covered in these sources. They do not give the specific debit liability rules or deadlines, so ask your bank directly about its process.
Handle Identity Theft as a Separate Process
One bad charge is not the same as identity theft. Warning signs of the bigger problem include:
- Bills for items you did not buy
- Debt collection calls about accounts you did not open
- Unfamiliar accounts on your credit report
- Loan applications denied for reasons you do not understand
- Mail that stops or goes missing
If you see these signs, report at IdentityTheft.gov, which lists recovery steps. The FTC phone line is 1-877-438-4338. You can also ask the three major credit reporting agencies for fraud alerts and a credit freeze. The FTC explains both tools. Contact the fraud departments of your card issuers and banks too.
Please seek a professional. This article is general information, not financial, tax or insurance advice. Please seek a licensed financial, tax or insurance professional about your own situation.
