These days there are so many different ways to monitor for fraudulent charges on a credit card. You should be in a position to notice such charges almost immediately. As soon as you do, you should take action. The faster you address the issue, the better chance you’ll have of not owing any money or becoming a worse victim of identity theft.
Contact the Credit Card Company
The very first thing that you should do is contact the credit card company. Ask to speak to a representative in the fraud department. Let them know that you see fraudulent charges on the credit card. They’ll ask you for some basic information to confirm that you’re the account holder. Then they will take action to help you.
You Are Protected
There are two key ways that you’re typically protected from having to pay a lot of money for fraudulent charges on a credit card:
- Most credit cards offer zero liability. In other words, they will reverse those charges for you. Sometimes they do so immediately. Other times they have to investigate.
- You also have federal protection. If you report a missing or stolen credit card before someone has used it then you don’t ever owe anything. If it has been used, you can only be charged up to $50 for fraudulent charges on a credit card.
Note that the rules are slightly different for debit cards. If unauthorized charges are made on your debit card, then you may be held liable for all, some, or none of those charges.
Ask the Credit Company What Steps They’ll Take
The credit card company may do any and/or all of the following things:
- Immediately reverse the charges so that you don’t owe the money.
- Contact the vendor and do an investigation then reverse the charges.
- Ask you to contact the merchant and work it out with them first. Then to call them back if that isn’t effective.
- Put a freeze on your credit card account at your request. This pauses the account while you take time to investigate the issue.
- Cancel the credit card number. Then they issue you a new card. This prevents you from further fraudulent charges on a credit card.
You might also want to follow up with the credit card company in writing. The FTC has a template for a sample letter that you can use to dispute all types of billing errors. They note the following important tips:
- Send the letter within sixty days of the phone conversation reporting the fraud, the sooner the better.
- Make sure to send it to the right address, which is usually not the same as the payment address for the credit card.
- Include copies of all pertinent information and supporting documents.
- Send it with a return receipt request so that you can be certain that it was received.
The FTC also offers additional information about disputing credit card charges.
Review Your Credit Cards and Credit Report
Once you have straightened out fraudulent charges with the credit card company, you need to make sure that you don’t have any other problems with your accounts.
First, check all of your credit cards for unauthorized transactions. If you see any, go through the same process to contact those companies.
Next, order your free credit report. Make sure that everything looks as it should. In particular, check to make sure that no new accounts have been opened in your name without your authorization.
The other key action to take at this time is to change all of your account passwords for online banking accounts.
Report the Fraud to the Credit Bureau
Once you know the extent of the fraud, it’s time to contact one of the three major credit bureaus: Experian, Equifax, or TransUnion. Let them know that you have been a victim of credit card fraud. Ask for them to put a fraud alert on your account. Alternatively, they can also freeze your credit, which might be the better option if you have been the victim of extensive fraud as opposed to fraudulent charges on one credit card only.
- Use These 5 Tips to Avoid Credit Card Fraud
- What Should You Do With an Unsolicited Credit Card?
- Don’t Pay for Identity Protection: Here’s What to Do Instead
- What is Synthetic Identity Fraud?
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