Do you see a transaction on your credit card statement that you don’t recognize? If so, you shouldn’t overlook this. It could very well be a fraudulent transaction or one that you did not authorize.
If you investigate and find that the transaction is the result of fraud, you have certain protections and can request reimbursement of fraudulent charges from your card issuer.
Confirm the transaction is fraudulent
Before deciding that a credit card transaction is fraudulent, make sure you are correct. It seems that consumers are prone to confuse a legitimate transaction with a fraudulent transaction.
For example, there may be an authorized user on your account responsible for the transaction. Check with them to make sure they haven’t initiated it. Another possibility is that you may not recognize a legitimate transaction because you cannot remember doing business with the named merchant. It could also be a false alarm, as some merchants bill under a different identity than the one they are doing business with.
Also note that you shouldn’t report fraud just because you don’t want to deal with a merchant. There is a process for dealing with situations such as:
- Not receiving a good or service for which you have paid
- Get billed for a recurring service you canceled
- Not getting credit for a product or service you are not happy with
- Be billed twice for the same item
- Be billed a higher amount than stated on your receipt
Such incidents are not considered fraud and it would be in your best interest to try to resolve the problem with the merchant before reporting it as such. Negotiating with the merchant tends to be a faster process in these cases than initiating a dispute with your card issuer.
Dispute procedure to obtain a refund
Once you have determined that you are indeed dealing with a fraudulent transaction, you should immediately notify your card issuer. Your issuer will likely lock your card and issue you a new card with a new number. Since the major Mastercard and Visa card networks have zero liability policies, you will not be responsible for legitimate fraudulent charges.
Visa requires issuers to credit you for unauthorized charges within five days of your notification. However, the credit is provisional, and they could also cancel the credit if they investigate after investigation that you were guilty of “gross negligence” or fraud, or that you have delayed reporting your loss. Credit may also be withheld, delayed or limited depending on the status and history of your account and the findings of the investigation.
The Fair Credit Billing Act also offers protections against billing errors, which include unauthorized charges. Under federal law, your liability for fraudulent use of your card is capped at $ 50.
To appeal for FCBA protection, send a letter of dispute to the address indicated by the issuer for any billing request, accompanied by a statement of your problem. You must send it within 60 days of mailing the first statement containing the fraudulent charges. As a precaution, send it by registered mail and ask for an acknowledgment of receipt in order to have proof of receipt. The issuer must resolve the matter within 90 days of receiving your letter.
FBI Tips for Preventing Card Fraud
The Federal Bureau of Investigation offers some tips to help consumers avoid credit card fraud. These include:
- Do not give out your credit card number online unless you recognize that a site is secure.
- Make sure the merchants you do business with are reputable.
- Research merchants to make sure they’re legitimate, using resources like the Better Business Bureau (and online customer reviews).
- Just because a business has a flashy website doesn’t mean it’s legitimate.
- Beware of unsolicited emails such as those offering investment opportunities (eg the notorious “Foreign Prince” scams), which are likely phishing attempts.
- Be careful when transacting with individuals and businesses overseas.
The bottom line
If you believe that you did not authorize a credit card transaction, confirm that it is indeed fraudulent and immediately notify your card issuer. With zero fraud liability policies, you will likely be credited with the amount involved shortly. However, the credit could be withdrawn after investigation by the issuer. And thanks to the Fair Credit Billing Act, you are not responsible for more than $ 50 in unauthorized charges.
Contact me at [email protected] with your credit card questions.