Unauthorized Transaction Help: Get Your Money Back Fast

What Is an Unauthorized Transaction?

An unauthorized transaction is a charge on your credit card, debit card, or bank account that you didn't make or approve. Under federal law, you have strong protections against these fraudulent charges, but you must act quickly to preserve your rights.

Legal Definition

According to Regulation E (for debit cards and electronic fund transfers) and the Fair Credit Billing Act (for credit cards), an unauthorized transaction means:

• A transfer or charge initiated by someone other than you
• Without your actual authority to make the transaction
• From which you receive no benefit

Common Examples of Unauthorized Transactions

✅ Clearly Unauthorized:

• Card stolen and used without your knowledge
• Card number stolen (data breach, skimming)
• Account takeover (fraudster changes password)
• Phishing scam where you were tricked
• Charges after you reported card lost/stolen
• Duplicate charges (charged twice for one purchase)
• Merchant charged wrong amount

⚠️ May NOT Be Unauthorized:

• Subscription you forgot about
• Family member used your card with permission
• Recurring charges you authorized
• Merchant name looks different from store name
• Buyer's remorse (you regret the purchase)

Key Statistics (2024-2025)

• 449,000+ credit card fraud cases reported to FTC in 2024
• $12.5 billion lost to scams in 2024 (25% increase YoY)
• 89% surge in consumer exposure in Q1 2025 vs 2024
• 35% of all fraud globally is credit card fraud
• 50% of e-commerce fraud is card-not-present (CNP) fraud
• 30% increase in account takeover fraud
• 22% rise in P2P payment fraud (Venmo, Zelle, etc.)

Your Legal Rights Against Unauthorized Charges

Two major federal laws protect you from unauthorized transactions: the Fair Credit Billing Act (FCBA) for credit cards and Regulation E (Electronic Fund Transfer Act) for debit cards and electronic payments.

Fair Credit Billing Act (FCBA) - Credit Cards

Maximum Liability: $50 (often $0)

Under the FCBA, your liability for unauthorized credit card charges is capped at $50, regardless of when you report the fraud. If only your card number was stolen (not the physical card), your liability is $0.

Key Protections:

✅ $50 maximum liability if physical card is stolen
✅ $0 liability if only card number is stolen
✅ No time limit for the $50/$0 liability cap
✅ 60 days to dispute charges from statement date
✅ Banks can't charge you while investigating (must remove charges)
✅ Quick resolution: Banks must investigate and respond within 30-90 days

Regulation E (EFTA) - Debit Cards & EFTs

Liability Depends on How Fast You Report

Debit card fraud protections are time-sensitive. The faster you report, the less you're liable for:

✅ Report Within 2 Business Days: $50 Max Liability

Best case scenario. Act fast to minimize loss.

⚠️ Report After 2 Days, Before 60 Days: $500 Max Liability

Still protected, but higher potential loss.

❌ Report After 60 Days: Unlimited Liability

You could lose everything stolen from your account.

⚠️ Critical: The 60-day clock starts from when your statement is sent, not when you notice the fraud. Always review bank statements immediately!

2025 CFPB Clarifications

In January 2025, the Consumer Financial Protection Bureau issued new guidance clarifying that:

✅ Banks cannot consider consumer negligence when determining liability for unauthorized EFTs
✅ No police report required: Banks can't demand you file a police report before investigating
✅ Strict investigation timelines: Banks must complete investigations within specified periods (usually 10-45 days) and reimburse you within 1 business day of confirming fraud
✅ Provisional credit: If investigation takes longer than 10 days, banks must give you provisional credit while investigating

Credit Cards vs Debit Cards: Fraud Protection Comparison

Both credit and debit cards offer fraud protection, but credit cards generally provide stronger and simpler protections. Here's a detailed comparison:

Feature	Credit Card (FCBA)	Debit Card (Reg E)
Maximum Liability	✅ $50 max (physical card stolen) ✅ $0 (card number only stolen)	⚠️ $50 (reported within 2 days) ⚠️ $500 (2-60 days) ❌ Unlimited (after 60 days)
Time Sensitivity	✅ Not time-sensitive for liability limit	❌ Very time-sensitive - must report within 2 days for best protection
Your Money at Risk?	✅ No - bank's money, not yours	❌ Yes - your cash is gone until refunded
Dispute Timeline	60 days from statement to dispute	60 days from statement to dispute
Provisional Credit	Charges removed during investigation	May get provisional credit after 10 days
Investigation Timeline	30-90 days	10-45 days
Refund Speed	Immediate (charges reversed)	10 days to 45 days (money back)

Why Credit Cards Have Better Fraud Protection

It's not your money: Credit card fraud uses the bank's money, not yours. With debit cards, your actual cash is stolen and you're waiting for reimbursement.
Simpler liability rules: Credit cards have a flat $50/$0 max liability. Debit cards have complex time-based tiers.
No immediate financial impact: Unauthorized credit charges don't affect your bank balance or ability to pay bills. Debit fraud can wipe out your checking account.
Better dispute processes: Credit card companies are generally more consumer-friendly in fraud investigations because of the FCBA's strong mandates.

💡 Best Practice: Use credit cards for online purchases and high-value transactions. Save debit cards for ATM withdrawals. This minimizes fraud risk and maximizes your legal protections.

Zero Liability Policies: Beyond Federal Law

While federal law caps your liability at $50 (credit) or $50-$500 (debit), most major card issuers offer Zero Liability Protection as an additional benefit. This means you owe $0 for unauthorized charges, even if federal law would allow them to charge you $50.

What Is Zero Liability Protection?

Zero Liability is a voluntary policy offered by card networks (Visa, Mastercard, American Express) and individual issuers. It typically covers:

✅ All unauthorized transactions (both card-present and card-not-present fraud)
✅ $0 liability for you (no $50 federal law cap applies)
✅ Quick refunds - often within 5 business days of reporting
✅ Applies to credit AND debit cards from participating issuers

Major Card Networks' Zero Liability Policies

💳 Visa Zero Liability Policy

Coverage: Protects you from unauthorized charges on your Visa credit, debit, prepaid, or reloadable prepaid card.

Requirement: You must report the fraud promptly and not have been grossly negligent (e.g., gave your PIN to someone).

Refund timeline: Issuers must replace funds within 5 business days of notification.

Note: Available to U.S.-issued cards. Some prepaid cards may have different terms.

🔴 Mastercard Zero Liability Protection

Coverage: You won't be held responsible for unauthorized transactions on your Mastercard credit, debit, or prepaid card.

Requirement: Report fraud promptly. Must use reasonable care in protecting your card (don't share PIN, report lost cards immediately).

Automatic: No need to enroll - protection is automatic on all Mastercard-branded cards.

Mastercard emphasizes that you won't be liable even if you didn't use a PIN or sign for the transaction.

💚 American Express Fraud Protection

Coverage: $0 liability for unauthorized charges on American Express credit and charge cards (and many co-branded cards).

Requirement: Report fraudulent charges promptly and have taken reasonable care of your card.

Additional benefit: Amex often provides temporary cards or emergency card replacement while traveling.

American Express is known for excellent fraud investigation and quick resolution.

🔷 Discover Zero Fraud Liability

Coverage: You're never held responsible for unauthorized purchases on your Discover credit or debit card.

Requirement: Report fraud promptly after discovery.

Monitoring: Discover also offers free fraud alerts and 24/7 monitoring.

Important Exclusions and Limitations

Zero Liability typically does NOT cover:

❌ Gross negligence: You gave your card and PIN to someone, wrote your PIN on the card, etc.
❌ Delayed reporting: You knew about fraud but waited months to report it (exact timeframes vary by issuer)
❌ Business/corporate cards: Zero Liability often doesn't apply to business accounts (check your agreement)
❌ ATM/PIN transactions in some cases: Some debit Zero Liability policies exclude PIN transactions where you were negligent
❌ Authorized users: If you authorized someone to use your card and they overspent

How to Check if You Have Zero Liability

Check your card issuer's website (search "zero liability" or "fraud protection")
Look at your cardholder agreement (section on "unauthorized transactions")
Call the number on the back of your card and ask
Look for Visa, Mastercard, Amex, or Discover logos - these networks provide zero liability

💡 Bottom Line: Even with Zero Liability, you still need to report fraud promptly. The faster you report, the faster you get your money back and prevent additional fraud.

How to Report Unauthorized Transactions: Step-by-Step

Quick action is critical when you discover unauthorized charges. Follow these steps to report fraud and maximize your protections:

Step 1: Contact Your Card Issuer Immediately (Phone)

Call the customer service number on the back of your card as soon as you notice unauthorized charges. Do this before anything else.

• Available 24/7 for fraud reporting (most major issuers)
• Report specific unauthorized charges - provide dates, amounts, merchants
• They'll freeze your card immediately to prevent additional fraud
• Request provisional credit (temporary refund while investigating)
• Get a reference number or case number for your report
• Ask when you'll receive a new card

What to say: "I need to report unauthorized charges on my card. I see charges on [dates] to [merchant names] for [amounts] that I did not make or authorize. I believe my card has been compromised."

Step 2: Follow Up in Writing

Federal law (especially FCBA) requires written notification to preserve all your rights. Send a letter or email within a few days of your phone call.

What to include in your written dispute:

• Your name, address, account number
• Date you notified them by phone and reference number
• List of unauthorized transactions (date, merchant, amount)
• Statement that you did not make or authorize these charges
• Request for investigation and provisional credit
• Date you discovered the fraud

Sample Dispute Letter:

[Your Name]
[Address]
[Date]

[Card Issuer Name]
[Fraud Department Address]

Re: Unauthorized Transactions on Account [last 4 digits]

Dear Fraud Department,

I am writing to report unauthorized charges on my account ending in [last 4 digits]. I contacted you by phone on [date] and was given reference number [number].

The following charges are unauthorized:
1. [Date] - [Merchant] - $[Amount]
2. [Date] - [Merchant] - $[Amount]

I did not make or authorize these transactions, nor did I give anyone permission to use my card. I believe my card was compromised due to [theft/skimming/data breach].

Please investigate these charges and issue provisional credit while you investigate. I have enclosed [any supporting documents].

Sincerely,
[Your Name]

Send via: Certified mail (for paper trail) or email to the fraud department. Keep a copy for your records.

Step 3: File a Police Report (Recommended)

While banks can't require you to file a police report before investigating (per 2025 CFPB rules), doing so strengthens your case, especially for large fraud amounts.

• Go to your local police department or file online
• Bring evidence: card statements, list of unauthorized charges, reference number from bank
• Get a copy of the police report
• Provide the report number to your card issuer

Why it helps: Police reports establish an official record of the crime, which can be crucial if the fraud is large or if the bank challenges your claim.

Step 4: Monitor Your Accounts Closely

Fraudsters often test cards with small charges before making large purchases. After reporting fraud:

• Check all your accounts (bank, credit cards, loans) for additional fraud
• Review statements from the past 60 days - fraud may have started earlier
• Set up fraud alerts and transaction notifications
• Enable two-factor authentication on financial accounts
• Consider a credit freeze or fraud alert with credit bureaus

Step 5: Update Automatic Payments

Once your card is cancelled and replaced, you'll need to update payment information for:

• Subscription services (Netflix, Spotify, etc.)
• Utility autopay
• Insurance payments
• Gym memberships
• Any other recurring charges

Pro tip: Keep a list of all subscriptions tied to each card so you can quickly update them if fraud occurs.

Step 6: Follow Up on Your Dispute

Don't assume your dispute is being handled. Stay proactive:

• Banks must investigate within 10-45 business days (Regulation E) or 30-90 days (FCBA)
• If you don't receive provisional credit within 10 days, call and request it
• Follow up every 1-2 weeks for status updates
• If your claim is denied, ask for a detailed explanation in writing
• You have the right to appeal denials

⏰ Critical Deadlines Recap:

✅ Credit cards: Report ASAP, but liability is capped at $50 regardless. Must dispute within 60 days of statement.
⚠️ Debit cards: Report within 2 business days for $50 max liability, or within 60 days to avoid unlimited liability.
✅ Provisional credit: Banks should provide temporary refund if investigation exceeds 10 days.

The Bank's Fraud Investigation Process

Once you report unauthorized transactions, your bank or card issuer must conduct a formal investigation. Here's what happens behind the scenes:

Investigation Timeline

Day 1: Initial Report

• Card immediately frozen/cancelled
• Case opened with reference number
• Temporary holds placed on disputed charges (credit cards)

Days 1-10: Initial Investigation

• Bank reviews transaction details (location, merchant, amount)
• Checks for patterns (was card used in person vs online?)
• May contact merchant for transaction records
• Provisional credit issued if investigation will take longer than 10 days

Days 10-45: Full Investigation (Regulation E)

• Bank analyzes transaction data more deeply
• May request additional documentation from you
• Compares your purchase history to disputed charges
• Final decision must be made within 45 days (90 days for new accounts or international transactions)

Days 30-90: Full Investigation (FCBA for Credit Cards)

• Bank completes investigation (usually faster than 90 days)
• Must notify you in writing of results
• If fraud confirmed: permanent credit applied
• If fraud denied: bank must explain why and allow you to appeal

What Banks Look For

Banks use sophisticated fraud detection to verify your claim is legitimate:

• Transaction location: Was the card used far from your home or in a different country?
• Purchase patterns: Does the charge match your typical spending?
• Card-present vs card-not-present: Online fraud is easier to prove (no signature or PIN)
• Timing: Multiple charges in short time span at unusual merchants?
• IP address: For online purchases, was the IP address associated with you?
• Merchant verification: Does merchant have records showing you authorized it?

Provisional Credit

What is provisional credit?

If the bank's investigation takes longer than 10 business days, they must give you temporary credit for the disputed amount while they continue investigating. This is required by Regulation E for debit/EFT transactions.

Important notes:

• Provisional credit can be reversed if bank concludes charges were authorized
• You must repay the provisional credit if bank's final decision goes against you
• For credit cards, charges are simply removed during investigation (not "provisional")

If Your Claim Is Approved

✅ Charges permanently removed (credit cards) or money refunded (debit cards)
✅ Written confirmation sent to you
✅ Bank pursues merchant/fraudster for recovery
✅ No further action needed from you

If Your Claim Is Denied

❌ Bank believes charges were authorized or you were negligent
❌ You receive written explanation
❌ Charges reinstated (credit) or provisional credit reversed (debit)
⚠️ You can appeal: Provide additional evidence or escalate to regulators (CFPB)

💡 Pro Tips for Smooth Investigations:

✅ Respond quickly to any bank requests for additional info
✅ Provide clear, detailed explanations of why charges are unauthorized
✅ Keep all emails and letters from the bank
✅ Follow up proactively - don't wait for the bank to contact you
✅ Be honest - misrepresenting authorized charges as fraud is illegal

Unauthorized Transaction Liability Calculator

Estimate your liability and potential recovery based on card type, fraud amount, and how quickly you reported it. This calculator applies federal law (FCBA for credit, Regulation E for debit) and zero liability policies.

Calculate Your Claim

Get an estimate

This calculator provides estimates based on federal law and typical zero liability policies. Actual liability depends on your specific card agreement, negligence factors, and how promptly you reported the fraud. Contact your card issuer for personalized guidance.

Unauthorized Transaction? Get Your Money Back Fast