On November 1, 2019, I sat down to pay my bills and make my budget for the month, just like I do on the first of every month. Nothing seemed out of the ordinary — that is, until I opened up my Chase app to pay off my credit card charges for the month before.
The balance on the card was over $2,000 — much more than what I spend on the groceries and dinners out that I charge to that card each month. A quick glance at the statement told me everything I needed to know: There were over a dozen purchases made at a Walmart in Montana. I don’t live in Montana, and I don’t shop at Walmart. My credit card had been used fraudulently.
And my experience was far from unique.
Credit card fraud is absolutely exploding worldwide. In 2018, credit card fraud accounted for the loss of $24.26 billion globally, an 18.4 percent increase from 2017. And fraud is still increasing — losses are expected to top $35 billion this year. Fraud experts told the New York Times in June that no matter how careful you are, it’s likely a question of when you’ll become a victim of fraud, not if.
With that in mind, the best thing for consumers to do is to be prepared for what might be the inevitable. By educating yourself on how to stay protected, what to do when you do encounter unauthorized charges, how to get justice, and how to move forward, you put yourself in the best possible position to handle the stress and hassle this kind of scenario can bring.
Read on to learn all your need to know about how to stop unauthorized credit card charges, and what to do if it happens to you.
An unauthorized credit card charge is a charge to your credit card that you didn’t make or consent to.
This can take a few different forms:
Things that do not count as unauthorized charges include purchases made by a friend or family member to whom you gave your card or information, or purchases you made and later regretted or couldn’t afford to pay off.
The best way to handle unauthorized credit card charges is to do whatever you can to prevent them in the first place. Fraud can’t always be avoided, but that doesn’t mean you shouldn’t take every possible precaution to employ as many defenses as you can.
This won’t stop fraud before it happens, but it will help you catch it as early as possible. By checking your credit card statements regularly for anything suspicious, you can report fraud to your card issuer as soon as it happens and prevent thieves from making more unauthorized charges.
Never share your credit card details with other people unless you trust them 100 percent.
Additionally, be prudent about where you make online purchases. Look for the lock symbol and https:// in the URL field of a website to ensure an ecommerce site is secure before you make a purchase or enter your payment information. Use a password manager to create strong, randomized passwords for your accounts, and don’t store your credit card information online when you can avoid it, even if it is more convenient to save your card details to use for later purchases. Keep up-to-date antivirus software on your devices to protect them from attacks that could compromise your personal data.
And finally, check devices carefully for signs of tampering before inserting your credit card. Card skimming devices are common on things like ATMs and gas pumps, and can steal your card information with just one swipe.
If your credit card goes missing for any reason, report it to the card issuer as soon as you possibly can to limit the window in which it can be used to make unauthorized purchases. Your card’s app may have a “freeze” or “lock” feature. If it does, use this to shut the card down as soon as you notice it’s missing.
An easy place for a credit card to go missing is in the mail. If you have any new cards coming by mail, keep track of when they should arrive, and alert the card issuer immediately if they seem to be taking too long.
Phishing scams are common in the digital age. This is where a scammer pretends to be a company and sends an email or text message or calls you requesting personal information, payment details, or login credentials.
Never answer one of these forms of communication directly. If you receive a text or phone call, look up the customer service number for the company and call them directly. If you receive an email, don’t click any links in it — open a new tab or browser window and go to the company’s website to sign in.
All these tips will help you keep tabs on credit cards you’ve opened yourself, but keeping an eye on your credit report is how you’ll know if someone steals your identity and uses it to open new accounts.
If you notice anything suspicious about your credit accounts or credit report, contact your card issuer or your bank immediately. When it comes to credit card fraud and identity theft, it’s much better to be safe than sorry.
When an unauthorized charge posts to your credit card, it’s not necessarily automatically a sign of fraud.
Let’s say, for example, you get double-charged by a merchant from whom you made a legitimate purchase. In that case, you just need to contact the merchant and let them know about the error, and they should reverse the charge for you (if they don’t, you have other options, like initiating a chargeback to get your money refunded).
It’s also possible for credit card companies to make mistakes, posting charges or fees to your card in error. If that happens, contact your credit card issuer and try to work it out with them. Most likely, they’ll want to correct any mistake they made by reversing the charge. If they refuse, you can report them to regulatory agencies and try to get your money back in other ways, like through consumer arbitration (more on that below).
Even if you take every precaution, your card can still become compromised. Here’s what to do if that happens, and you have reason to believe it’s fraud and not an error.
It’s surprising and violating to discover unauthorized charges on your credit card. Anxiety is a completely normal response. But don’t panic. Take a deep breath and try to stay calm. You can fix this.
If your online banking or mobile app gives you an option to automatically lock or freeze your card, do that as soon as you notice suspicious activity.
If you have the physical card in your possession, call the number listed on the back of it. Otherwise, do an online search for a customer service phone number or fraud prevention line for cardholders. Call and let them know what looks suspicious and why.
It isn’t required to file a police report over unauthorized credit card charges, but you should do so anyway. This way, law enforcement can look for patterns of fraud, and it might help them crack down on criminal operations faster, preventing them from stealing from more people.
Pull up your most recent credit card statements and go through each transaction one by one. Look for any transactions you didn’t make, or any you’re unsure about.
Change your passwords for your online credit account and any accounts that have your credit card information stored. For extra security, use a reputable password manager to create randomized, high-security passwords.
Finally, call the credit bureaus and let them know you’ve had a compromised account. They can issue a fraud alert that requires them to seek additional identity verification if anyone tries to open an account in your name, which can be the difference between one compromised credit card, and identity theft. A fraud alert is free and remains on file with all three major credit bureaus for one year.
Once you’ve taken the steps above, you shouldn’t need to do anything else unless your card issuer contacts you for more information, or law enforcement reaches out to you about an investigation.
Federal consumer protection laws give credit card holders an extra safety net in the event of fraud: They ensure that consumers aren’t liable to pay for any unauthorized credit card charges once they’ve reported them, and they prohibit card issuers from charging interest on unauthorized purchases while they’re being investigated. You will, however, need to pay any portion of the bill that’s made up of legitimate charges you made.
If there’s no evidence showing the charges aren’t actually unauthorized, your credit card issuer should reverse them, and the law requires them to do so within two billing cycles.
Ideally, everything we’ve described in this article so far played out and your unauthorized credit card charges have been resolved and reversed.
But we know life isn’t always that easy, so let’s look at a few scenarios where things don’t work out perfectly, and what you can do.
Let’s start with situations that aren’t real credit card fraud, because without the protections of federal law, they can be a little trickier to navigate. If a merchant you do business with double-charges you, or charges you incorrectly, you have a few options: Asking your card issuer for a chargeback, reporting the merchant to any regulatory board that oversees them, or taking the merchant to small claims court.
If the problem is with your credit card issuer not reversing charges you didn’t make, you can report them to the Consumer Financial Protection Bureau.
And any time a business owes you money and you need help getting it back, one option is consumer arbitration. It works a little bit like small claims court: You and the business will present your sides of the dispute — and any evidence — to an independent third party called an arbitrator, who will make a legally binding decision about who is in the right and, if needed, award compensation.
Arbitration can be an intimidating process, which is why FairShake is here to help. With a combination of automation and one-on-one guidance, we help you navigate every step of the arbitration process, from sending your initial demand letter all the way until you receive a settlement or attend a hearing. FairShake can help you get your fair shake against big companies that act poorly. Learn more about how to get power — and money — back in your hands on the FairShake blog.