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How to Dispute a Fraudulent Credit Card Charge

6 min read
Brendan Harkness Michelle Black By Brendan Harkness and Expert reviewed by Michelle Black Jul 31, 2018 | Updated Dec 05, 2019

It can be disconcerting to find an unrecognized credit card charge, but disputing questionable transactions is simple when you understand your rights.

Not only is the federal law on your side, but credit card issuers usually have your back, too. Here’s how to dispute credit card charges when it comes to fraud, billing errors, and even unfulfilled merchant promises.

How to Dispute Credit Card Charges Caused By Fraud

If you find a charge you don’t recognize, you should first ask any friends and family if they made the charge without your knowledge. (You’d be surprised how often this happens!)

If they didn’t, it’s likely your card number was compromised. In that case, you should call your credit card issuer immediately and dispute the fraudulent transactions. Your card issuer will start an investigation and freeze or deactivate your card to prevent further fraudulent charges. The issuer will send you a new card with a new card number and CVV.

If you suspect that you’re also a victim of identity theft, and your personal details have been compromised (like your SSN), you should take steps to freeze your credit reports. This may prevent others from opening up new credit accounts or taking out loans in your name.

It’s a good idea to check your three credit reports as well, to see if any fraudulent accounts have already been opened in your name, without your knowledge. If you discover fraudulent accounts on your credit reports, you can visit to report the crime and create a recovery plan.

Once you’ve notified your card issuer about any fraudulent changes and have been issued a replacement card, there’s not much to do other than wait.  The Fair Credit Billing Act (FCBA) states that credit card users are only liable for up to $50 in fraudulent charges.

The major credit card networks — Visa, Mastercard, Discover, and American Express — take it a step further by offering “zero liability” policies. This means that in cases of fraud, you won’t have to pay a dime.

As mentioned, the issuer will send you a replacement card with a new account number, and you can get back to your normal life. If you’ve added the card to a digital wallet like Apple Pay, some issuers will update the card there immediately, before you even receive your new physical card in the mail.

Here are a few extra steps you could take:

Even if you think you’re careful with your cards, criminals are always developing new, sophisticated ways to steal information. Krebs on Security has a great page detailing some of the ways people steal credit card information. Luckily, if you’re the victim of one of these thieves and you report the theft, it’s unlikely you’ll be liable for the charges.

How to Dispute Credit Card Charges Caused By Billing Errors

See a double charge from your favorite sushi restaurant on your statement? Or a $100 charge that should’ve only been $10?

Your first step should always be to contact the merchant. In the name of customer service, merchants will often resolve the issue by refunding your card for the surplus amount when you feel you’ve been overcharged.

If the merchant refuses to help you, you can begin the dispute process with your credit card issuer. Here’s what you have to do.

1. Write to Your Credit Card Issuer

Legally, you have 60 days after receiving the erroneous bill to report the mistake to your issuer — in writing.

Although the Federal Trade Commission (FTC) advises sending a letter via certified mail, that’s not always necessary these days. Many card issuers allow you to submit claims through “dispute” buttons on their sites, or by sending notes through their secure message portals.

Note: If you think you might eventually need to go through the legal system to resolve your situation, sending a certified letter to the card issuer’s billing inquiry address could be an important step. An attorney can advise you further.

In your dispute, include as many details as possible about the charge: names, dates, and any proof the charge isn’t yours. Though this isn’t required by law, it can be helpful. For more guidance, check out the FTC’s sample letter.

The credit card issuer must acknowledge its receipt of your dispute within 30 days. And if the charge is nominal — usually under $25 — you probably won’t have to do anything else. Since it would cost the credit card company more money to open up an investigation, it’ll generally eat the cost of your disputed purchase, and you can go on your merry way.

Don’t abuse the ability to easily dispute small charges. The card issuer will eventually catch on, and may cancel your account.

2. Wait for Your Issuer’s Decision

According to the FCBA, the card issuer has two billing cycles (and a maximum of 90 days) to resolve your claim with the merchant.

During that time, you shouldn’t pay for the disputed charge — but you must pay the rest of your credit card bill on time.

Take note that the disputed charge will still affect your credit limit. If your credit card has a $2,500 limit, for example, and you’re disputing a $500 charge, you’ll only have $2,000 to spend on your card until the dispute is resolved.

In most cases, credit card issuers will side with the consumer and take the charge off your bill. If it believes the charge is legitimate, however, it’ll support the merchant and make you pay for the charge.

How to Dispute Credit Card Charges Caused By Poor Quality of Goods and Services

Imagine you paid a plumbing service that never showed upor you purchased a TV that doesn’t work. Though you might not know it, credit card companies often have your back when dealing with issues like this and so does federal (and perhaps state) law.

If you receive goods that are damaged, defective, or not as described — or you didn’t receive the promised goods or services at all — you can request a “chargeback” from your card issuer. (Here’s a list of chargeback reason codes, organized by issuer.)

As with billing errors, you should always dispute the charge with the merchant first when you have an issue with the quality of goods or services you received. Many merchants want to do the right thing for their customers and will work with you to find a resolution. Merchants also prefer to avoid chargebacks. Chargebacks can mean higher payment processing fees for merchants, and they may face other penalties if they get too many.

If the merchant refuses to cooperate, it’s within your legal rights to request a chargeback from your credit card issuer, as long as the following requirements are met:

  • The purchase must have been at least $50.
  • You must have made the purchase in your home state, or within 100 miles of your current billing address.
  • You must have made a “good faith effort” to resolve the dispute with the merchant.

To be on the safe side, you should request chargebacks within 60 days of the disputed purchase. Contact your credit card issuer via phone or secure message to begin the process.

Some credit cards also offer purchase protection, return protection, and other benefits. These can provide reimbursement if eligible purchases are broken or stolen, or if the merchant refuses to take back an item.

When Your Dispute or Chargeback Request Is Denied

Credit card issuers often side with their cardholders. Yet there are times when your credit card dispute or chargeback request may be denied. Here are a few reasons why that might happen.

  • You waited too long to contact your card issuer. It’s important to notify your card issuer of a billing error or chargeback request within 60 days of the statement date.
  • You didn’t contact the merchant. Other than cases involving fraud, you should give the merchant the opportunity to resolve the situation first.
  • You made a purchase outside of the United States. Consumer protection laws that apply to credit card disputes and chargebacks may not apply to purchases made in other countries.
  • You lied. If you make up a story to try to get your money back from a merchant, there’s a good chance you’ll get caught. Not only may your dispute or chargeback request be denied, the card issuer might close your account as well.

Actions You Can Take If Your Claim Is Denied

If your credit card dispute or chargeback request is denied, but you believe you’re owed a refund, these steps might help.

1. Challenge the Investigation

If a card issuer doesn’t find in your favor, it must give you a written explanation that tells you why. You can challenge the investigation results within 10 days of receiving this notice.

2. Involve Someone Else

If you think your card issuer is ignoring your rights, you can file a complaint with the following organizations:

3. Talk to an Attorney

If the charge is for a significant amount and you don’t think a credit card company is handling your situation properly, you might consider speaking with an attorney. You can find attorneys who specialize in the FCBA and other consumer protection laws by visiting the National Association of Consumer Advocates.

Use Your Power Wisely

As you can see, the FTC and credit card companies put a lot of trust in cardholders.

In fact, these consumer protections are one of the biggest reasons we advocate using credit cards instead of debit cards.

So it’s imperative not to lie or exaggerate. Taking advantage of generous credit card policies — by falsely claiming you never received a product, or by claiming an honest charge was fraudulent — doesn’t benefit anyone.

Unnecessary chargebacks also cost merchants a lot of money. And, if you request questionable chargebacks often, the credit card issuer may decide to close your account permanently.

By wielding our powers wisely, we can continue to enjoy the benefits of the best credit cards for many years to come.

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  • Melanie Smith

    I’ve wasted over $1300 on Lexington law and got poor results with removing items from my credit report..I was able to remove all the negative items after contacting spaceweb DOT hacks AT gmail DOT com and raise my credit score to 800+, he was able to clear my credit card debts and student loans

  • omshhaol

    Does the Fair Credit Billing Act (FCBA) apply to fraudulent transactions made on a (VISA branded) credit card issued by a non-U.S. bank to a U.S. citizen, when the card got stolen in the U.S., was used to make a fraudulent purchase in the U.S.?

    • John Ganotis

      I’m not sure, but I think it would only apply to cards issued by banks based in the U.S.

      • omshhaol

        Thanks for the quick reply..

        I think an argument can be made that with all the elements that do involve the US, that a “federal” law would impose liablity on a non-US bank… Still, while the FTC does have authority to enforce this law on a bank, they aren’t goung to try and collect on tbe card holder’s behalf, instead, any successful “enforcement action” would impose penalties on the, but would then leave the issue of me recovering my losses (due to the fraudulent credit card activity) to me by way of a civil suit whereby I can cite The Fair Credit Billing Act as the basis for legal action against the foreign bank.

        I also suspect that I can include a demand for court costs amd attorney fees. The uphill challenge though remains to be serving the foreign bank with court papers.

        With all that said, I can offer that I have received preliminary confirmation that VISA’s Fraud Protection Policy generally applies worldwide (to most cards carrying the VISA logo) and more.specifically to th2e type card I have even though it was issued by a non-US bank.

        If you’d like, I can update this post as I get through the.process of trying to resolve my case.

        • John Ganotis

          Sure, it may helpful to other readers if you can share your experiences.

  • Diane Wah

    We disputed a charge that, to our reading of the Fair Credit Billing Act, chapter 4, section 161, qualifies as a billing error: a car rental company put through a charge we did not authorize for alleged damages; we requested verifying evidence (photos, invoices, etc) of the damages and related costs because when the vehicle was recovered by the police, the report said there was no damage and it was operable, and the registered owner (a representative of the car rental agency) “relayed no damages” to the recovery officer. However, our credit card company denied our dispute, claiming that our declining the collision essentially means we have up our right to demand “documentary evidence” and our right to authorize charges to our card. What recourse do we have now with our credit card company?

    • Michelle L. Black

      It’s definitely frustrating to be charged for something you believe isn’t fair. I’m filling in the blanks a little here, but it sounds like your rental car was stolen and subsequently recovered by the police without any initially apparent damage. From there, it seems either damage was discovered later once the vehicle was inspected closer or something shady went down at the rental car company. (It happens!)

      Here’s the bad news. Unfortunately, because of the agreement you signed when you rented the car, you likely agreed to accept liability for any damages. You may have even waived your right to dispute disagreements over damage-related charges with your credit card company. (Of course, you’d need an attorney to review the rental agreement to let you know for sure.)

      So you may not have any further recourse to try to get the money back from your credit card company under the FCBA. But that doesn’t necessarily mean you’re out of options. First, the credit card you used to rent the car may offer primary or secondary rental car insurance coverage. (See this guide for details: If your card doesn’t offer rental car coverage, your primary auto insurance policy will likely cover you. Chances are you may have auto insurance coverage in place that could help to take care of at least some of the damages (perhaps minus a deductible).

      You may also try to fight unfair damage charges from a rental car company in other ways. You can file a complaint with the Better Business Bureau or your state attorney general. Some people have been known to contact their local newspaper or television station with the story. Others have tried to appeal to a rental car company’s corporate offices for help. Finally, if the bill for the damage is large enough to justify the expense, you might consider speaking with an attorney as well.