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Credit cards are among the most commonly used forms of payment today. With an abundance of choices, consumers can open accounts that allow them to borrow tens of thousands of dollars each month. This wide selection and increased buying power also puts cardholders in the sights of criminals. Consumers who notice unauthorized charges on their credit cards should be wary of fraud and know their rights. If you notice charges on your credit card that do not belong to you, take action immediately. If a bank is refusing to investigate or reverse fraudulent transactions, contact Maginnis Howard for help.
Most consumers diligently observe their credit card transactions throughout the month. Many banks offer security measures that send transaction alerts and encourage consumers to review their statements carefully. However, even the most responsible credit card holder can fall victim to unauthorized charges, as cards can be lost or stolen in many ways. Recently, we’ve seen cybercriminals utilize phishing attacks, data breaches, and automated brute-force programs to get the necessary credentials without ever having to touch a physical card. When you notice unauthorized charges, it can be panic-inducing, and you may worry that your bank won’t refund you.
Financial institutions routinely offer special fraud protections as a credit card benefit. However, these protections are supported by federal laws that reduce consumer liability for unauthorized charges.
The Truth in Lending Act requires lenders to disclose key loan terms before consumers sign. It applies to most consumer credit transactions, such as mortgages and car loans, as well as open-end credit, such as credit cards. Lenders must provide standardized disclosures about loan terms and the total cost. This includes clearly stating the Annual Percentage Rate (APR), the total cost of the credit line, including fees, and the payment schedule. Additionally, the TILA gives consumers 3 days from the date of signing certain loans to cancel the loan without penalty.
The Fair Credit Billing Act is a federal law enacted in 1974 as an amendment to the Truth in Lending Act. The FCBA protects consumers from unfair billing practices and provides a means to resolve billing errors on credit card accounts. Consumers can dispute errors within 60 days of the statement date, and creditors must acknowledge the dispute within 30 days. After acknowledging the dispute, a creditor has two billing cycles (90 days) to resolve it. Crucially, creditors cannot demand payment for charges under investigation until the investigation concludes.
The Hidden Cost of Fraudulent Charges
Unauthorized charges left uninvestigated can improperly lower a credit score. This hinders an individual’s ability to obtain favorable loan terms, secure the best insurance rates, and more. For many consumers, the damage to their credit score is more consequential than the dollar amount of the fraud.
Based on the patterns we see in these cases, here are some indicators that your card issuer may not have met its legal obligations:
The FCBA requires a reasonable investigation—not merely checking a box. If the company ignored evidence you provided, failed to review transaction records, or relied on irrelevant factors, the investigation may not satisfy the statutory standard.
Card-present transactions made hundreds or thousands of miles from your location are strong evidence of unauthorized use. If the bank ignores this anomaly, it can indicate their investigation was not sufficient.
If you have never taken a cash advance and suddenly your card is used for dozens of cash advances, that anomaly should weigh heavily in any investigation. A company that ignores such patterns may be violating the Fair Credit Billing Act.
Under TILA, your maximum liability for unauthorized credit card charges is $50. If your card company is holding you responsible for more than that and cannot prove you authorized the transactions, it may violate federal law.
Consumers with FCBA and TILA claims may be entitled to financial compensation. Potential recoveries include actual damages (the money wrongfully charged, plus consequential losses), statutory damages (up to $5,000 under TILA), damages for emotional distress caused by the wrongful billing and collection activity, a court declaration that the consumer is not liable for the disputed charges, and reasonable attorneys’ fees and costs. That last point is critical: under both statutes, the credit card company may be required to pay the consumer’s legal fees. This makes it economically feasible to bring a case even where the dollar amount of the fraud itself might not justify the cost of litigation.
If your credit card company has denied a legitimate fraud claim, take the following steps. First, preserve all documentation: save every statement, letter, email, and phone call record with your card issuer. Second, send a written dispute as quickly as possible. The FCBA requires that billing error disputes be submitted in writing within 60 days of the statement date. If the company denies your claim or refuses to investigate, consult with our consumer protection attorneys. Our consumer lawyers are well-versed in FCBA and TILA claims. Additionally, we handle these cases on a contingency or fee-shifting basis, meaning you may not have to pay legal fees out of pocket. Both the FCBA and TILA authorize courts to grant reasonable attorneys’ fees to consumers who prevail, a rule meant to help individuals hold big financial institutions accountable.
Schedule your free consultation with our experienced unauthorized credit card charges lawyers today. We handle consumer cases on a contingency fee basis, which means you pay nothing unless we recover compensation for you.
To discuss your case, contact our team by phone at (919) 526-0405 or via our contact page. We represent clients across the Carolinas from our Raleigh, Charlotte, and Fayetteville offices.
Most credit cards allow consumers to dispute charges within 60 days of their statement billing date, but the faster you can report a suspicious charge, the better.
Generally, consumers are only liable for up to $50 for fraudulent charges.
No, the Truth in Lending Act makes it easier for consumers to compare loans and credit cards, but it does not set limits on APRs or fees.
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