How To Dispute A Fraudulent Credit Card Charge

John Ulzheimer

John Ulzheimer | Blog

Jun 18, 2014 | Updated Apr 27, 2016

Finding a fraudulent or unrecognized credit card charge can be disconcerting, but the process of disputing a questionable transaction is actually quite simple if you understand your rights and the process. Not only do you have Federal law on your side, credit card issuers are also generally pretty easy to work with when you find unauthorized charges on your statement. Here’s what you can do, and expect, when disputing a credit card charge.

As soon you as you realize that your credit card has a fraudulent or incorrect charge, try your best to determine what happened. There are 2 basic scenarios to consider: 1 in which you lose your card or it is stolen, and 1 in which a merchant makes an error.

If You Lost Your Card

Step 1

If the charge occurred because your physical credit card or card number was lost or stolen, you’ll want to call your credit card issuer immediately to report the account as being compromised. Your card issuer will likely ask you for more information related to the charge, including the merchant and the transaction amount.

Step 2

If you don’t recognize the merchant or the transaction, your issuer will likely deactivate the card immediately. You’ll be instructed to stop using the account until they mail you a replacement card with a new account number, which usually takes 3 to 5 business days to receive. If you have the card number stored in websites you’ve purchased from in the past, or it is linked to recurring transactions, update the payment information accordingly.

Per the Fair Credit Billing Act, credit card users are liable for no more than $50 in fraudulent charges. Even then, most credit card issuers will not hold you liable for anything thanks to the zero liability policies of the four major credit card networks: Visa, MasterCard, Discover and American Express. The combination of federal regulations and kindly payment processors makes credit card transactions perhaps the safest of all forms of commerce.

For Merchant Errors

Step 1

If the unrecognized charge is due to a merchant error, such as double billing or failure to issue a proper refund, you’ll still want to dispute the charge. In that case it’s unlikely the card issuer will deactivate your credit card. You may be able to solve the problem by contacting the merchant directly and not involving your card issuer.

Step 2

If you don’t get immediate resolution from the merchant then you will want to involve the card issuer. Keep in mind, however, you have 60 days from the time you notice the billing error to notify your credit card issuer of the incident. The notice should be in writing and include any documentation you have to support your claim.

Many card issuers will allow you to submit the dispute by secured email rather than via old-fashioned U.S mail. In either case, the credit card issuer must acknowledge receiving your dispute within 30 days.

What Can I Expect After I Submit A Dispute?

Once you’ve disputed the charge, the card issuer will credit your account for an amount equal to the charge. This applies for either fraudulent charges or merchant errors. That means any payment you make on the account will not include paying the questionable transaction. At this point the card issuer will likely reach out to the merchant to get their side of the story before deciding on a final resolution.

If the charge is actually fraudulent or erroneous it’s unlikely the cardholder will ever be asked to pay it back. It will never show up on the statement again. If, however, the merchant stands firm and suggests that the transaction was legitimate, the charge may reappear on your statement and you’d then be liable for payment. You can maximize your chances of having the card issuer side with you in the dispute by choosing reputable credit card companies.

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