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How to stop unauthorized credit card charges

Monitor your card activity so you can immediately take action.

Updated

Fact checked

Whether it’s due to card theft, account hacking or perhaps even a glitch in payment processing, unauthorized credit card transactions can certainly be frightening While there are fraud protection policies in place to help safeguard you against such events, there are instances when you may become liable for the losses arising from such transactions. That’s why it’s important to know what to do if you notice unusual activity on your credit card account.

What to do when you think your credit card is compromised

After the initial stress of finding out unauthorized charges on your credit card account, take a deep breath and calm down. Everything can be resolved.

  • Lock your card. Some cards let you lock or freeze your credit card online or through your mobile app. If this is a possibility — use it.
  • Call your credit card provider. If the card is physically present, call the number on the back of your card. Otherwise, look for the number on your credit card statement or online. Credit card providers have zero liability policy, meaning you won’t be held liable for unauthorized charges you report to your card issuer.
  • Review your credit card transactions. Make sure you note all transactions you didn’t make. You can also check your other credit card transactions to make sure they aren’t compromised as well.
  • Change your password and PIN. Proceed to change your password and credit card PIN to prevent additional unauthorized charges.
  • Call the credit bureaus. If multiple credit card accounts are compromised, call the credit bureaus. In this case, you may also call the police and file a report — especially, if you suspect identity theft.

More tips for avoiding unauthorized credit card transactions

These 14 tips will help you minimize the risk of an unauthorized credit card transaction:

  1. Monitor your credit card transactions.
    If an unauthorized transaction is made, it will show up on your credit card account and statement. Take the time to review your statement details regularly and be on the lookout for any unauthorized transactions. Luckily, most card issuers will notify you if they suspect fraudulent activity.
  2. Keep your PIN or other card details safe.
    Always make sure to cover the keypad when entering your PIN at the checkout or when withdrawing cash from an ATM. You may not be able to get your money back if you’re careless with your PIN or password.
  3. Only make payments through secure services.
    This relates to online payments, where you should only transact on web URLs beginning with “https” that show a locked padlock symbol. It also applies to your Internet connection, which means you shouldn’t use your card when using public connections such as free Wi-Fi networks in cafés or airports. These networks are less secure than private, password-protected connections and increase the risk of hacking.
  4. Get up-to-date antivirus software.
    Stay protected with anti-spyware and antivirus software, especially if you often transact over the Internet. This will protect your accounts from online hacking.
  5. Be prudent on the Internet.
    Many online accounts and services now suggest you store your credit card details for ease of payment. The problem is that some of these services hold enough personal details about you for a criminal to be able to steal your identity.
  6. This makes it important to protect your accounts by limiting the information you provide and using complicated and varied passwords. Practice safe email protocol and don’t open messages from unknown senders. When you’re shopping online, look for https:// at the beginning of the website address instead of http://. This means that the website has added security and you’re less likely to be a victim of fraud. You should also look at the website’s reviews to see if there is any evidence of negative feedback or poor reviews of products. If an item is offered for considerably less than the online retail price, you should also be wary as it’s likely to be a scam.
  7. Look for signs of tampered devices.
    This relates to credit card skimming and is very important at ATMs and stores where you’re using your card. A good practice is to look out for irregularities when at the ATM, particularly for machine parts that look odd, overly new or that are loose. When paying in a store, make sure your card stays within sight and only gets swiped once. Always shield your PIN when entering it.
  8. Report lost or stolen cards.
    Immediately reporting a lost or stolen credit card reduces the window of opportunity for anyone to make any unauthorized transactions. It’s also one of the criteria for fraud protection.
  9. Even if you think you’ve simply misplaced your card, call your credit card company to inform them so they’ll keep a close eye on your account. You may even be able to freeze your account while looking for your card. For example, Discover lets you temporarily lock your card using their mobile app to prevent unauthorized charges.
  10. Keep track of when a new card should arrive in the mail.
    If you’ve applied for a credit card or your old one has expired, make sure you regularly check your mailbox to ensure you receive your new card on time. This will alert you to mail theft that could lead to unauthorized transactions, especially if the card is enabled for contactless payments.
  11. Contact the merchant if there is a processing error.
    This will speed up the resolution process if a transaction has been made by mistake. If you’re in-store when it happens, talk to an employee or manager to see if they can reverse the transaction on the spot. If you’re online, contact customer service so that they can look into it as quickly as possible.
  12. Contact your credit card issuer about anything suspicious.
    The rule of thumb is to inform your card issuer about any suspicious activity as soon as you possibly can. If it’s an unauthorized charge from a merchant you’ve done business with, they may advise you to resolve it directly. However, where it’s fraudulent or when it’s not possible to reverse the transaction via the merchant, your credit card issuer will launch an investigation and guide you through the resolution process.
  13. Check your credit report.
    You should also monitor your financial history through your credit report. If you see any listings, such as credit card applications you didn’t make, contact the relevant card issuer and the credit reporting bureau immediately to investigate the issue and have it removed from your report.
  14. Be wary of suspicious emails, text messages and calls.
    The correspondence will vary, but a scam email or text message could be asking you to update your details, reporting an overdue account or flagging a fraudulent transaction. Messages claiming you’ve won a prize or competition are also common. So be extra cautious if you haven’t entered a competition. Don’t provide your personal details to an unfamiliar caller or in response to an unexpected text message.If you receive an email or text that appears to be from your bank, always check the phone number and address that it’s from before responding. Don’t click on any links or download any attachments from any email. If you’re suspicious, don’t respond and contact your card issuer directly via the contact number listed on their website instead.

    If you receive a call from someone who claims to be your bank and asks you to confirm your card information, don’t provide any information. Instead, contact your bank directly using the contact details listed on their website to find out if it was a legitimate call. You should be especially careful if the call is from an international or blocked number.

  15. What is an unauthorized credit card transaction?

    Unauthorized transactions are payments made by someone else using your credit card account without your approval or knowledge. There are two ways this can happen:

    • Processing errors.
      Processing errors occur when you’re making a payment and is usually the result of technical issues with the payment service or Internet connection. For example, you could accidentally be charged twice for something because of a faulty connection, software glitch or because you reloaded a payment page while shopping online.
      Note that processing errors can occur both through merchants and through credit card issuers. In most cases, you should be able to reverse the charge by contacting the merchant or your credit card issuer directly.
    • Fraudulent transactions.
      Fraudulent transactions are intentional and illegal, and they result from criminal activity that occurs when your credit card account has been compromised. A clear example of credit card fraud is if your card is physically stolen and the thief uses it to make a purchase.
      Similarly, if your card details are stolen through online hacking, that would be considered fraudulent too. In most cases, you will be refunded the full amount of a fraudulent transaction after contacting your credit card company and having them investigate the incident.

    Other forms of protection against unauthorized transactions

    These are the default forms of protection available to consumers, depending on your card type:

    • Fraud monitoring services.
      Most card companies have internal systems in place to prevent card fraud. This includes sophisticated software and analytics teams that monitor your credit card transactions, who will contact you if they see unusual activity on your account.
    • If you don’t inform your card provider before going overseas, they may freeze your account if their fraud-monitoring team thinks that someone has stolen your card and is using it abroad.
    • Chip technology.
      Credit card chip-and-PIN technology offers you greater protection because anyone who steals your card will also need your PIN to use it.
    • Verified by Visa.
      Also known as Visa Secure, is an extra layer of security for Visa cardholders when transacting online with participating merchants. When making payments through the service, a one-time password is sent to your mobile phone to verify your identity and protect your card from use by card thieves.
    • Mastercard SecureCode.
      This is similar to Visa Secure and is the process whereby Mastercard holders receive a security code on their mobile phones that they need to key in to verify online transactions.
    • Zero liability. Both Visa and Mastercard have zero liability policies that free you from liability for unauthorized charges made on your account. American Express also offers a Fraud Protection Guarantee that means you won’t pay for unauthorized spending on your card. While the terms and conditions vary slightly for each company, all these policies cover card loss, card theft and card fraud both online and offline.

    Compare credit cards

    Name Product Filter values Rewards Purchase APR Annual fee
    Blue Cash Everyday® Card from American Express
    2% at US gas stations and select US department stores, 3% at US supermarkets on up to $6,000 per year, then 1% after that and on all other purchases
    0% intro for the first 15 months (then 13.99% to 23.99% variable)
    $0
    Get 3% cash back on groceries on up to $6,000 annually (then 1%) with no annual fee. This is a simple and effective rewards card. Rates & fees
    Chase Freedom Flex℠
    5% back in rotating categories up to $1,500 combined each activated quarter (then 1%), 5% on travel purchased through Chase, 3% on dining and drugstores, and 1% on all other purchases
    0% intro for the first 15 months (then 14.99% to 23.74% variable)
    $0
    Get up to 5% cashback in rotating and newly added everyday categories. The refreshed Freedom Flex card has lots of earning potential.
    Chase Sapphire Preferred® Card
    5x points on Lyft, 2x points on travel and dining and 1x points on all other purchases
    15.99% to 22.99% variable
    $95
    Earn a huge signup bonus worth $$1,000 with this popular travel card. Combine with other Chase Ultimate Rewards cards for even greater value.
    Citi® Diamond Preferred® Card
    N/A
    0% intro for the first 18 months (then 14.74% to 24.74% variable)
    $0
    An impressive 18 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.
    Blue Cash Preferred® Card from American Express
    6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on all other purchases
    0% intro for the first 12 months (then 13.99% to 23.99% variable)
    $95
    Perfect for families: Get up to 6% on everyday purchases and a welcome offer worth $250. This heavy-hitter rewards card has uncontested value. Rates & fees
    loading

    Compare up to 4 providers

    How to dispute a fraudulent credit card transaction

    Whether the fraudulent charge was made by a billing error because you received damaged goods or poor quality service, contact the merchant to try and resolve the issue. If they don’t want to cooperate, you can request a chargeback from your card issuer.

    To get a chargeback, the following requirements must be met:

    • The cost of disputed goods or services must be $50 or higher.
    • Purchase must be made in your home state or within 100 miles of your home address.
    • You tried to resolve the dispute with the merchant first.

    Bottom line

    Even though consumer protection laws strongly insure you against unfortunate events like card loss, theft and fraud, you’re better off avoiding these issues when you can.

    Now that you’re more aware of the possible risks, finding the right credit card should be easy. Make sure to compare your options.

    Images: Shutterstock

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