Can You Be Held Responsible for Fraudulent Credit Card Purchases?

You generally are not responsible for fraudulent credit card purchases you did not make or approve. Federal law limits your liability to $50, and in many cases, you owe nothing.

The Truth in Lending Act and related federal rules protect consumers from unauthorized credit card use. The amount you may owe depends in part on whether your physical card was stolen and when you told the card issuer about the problem. A Florida credit card fraud lawyer can explain these protections when a company tries to collect money for charges you did not make.

How the $50 Limit Works

If someone steals your physical credit card and uses it before you report the loss, federal law generally limits your responsibility to no more than $50. If you report the card missing before anyone uses it, you are not responsible for unauthorized charges made afterward.

You also generally owe nothing if you still have your card, but someone steals only the card number and uses it without your permission. Some credit card companies voluntarily provide even greater protection than federal law requires.

These rules apply to credit cards. Debit cards have different rules, and your possible losses may depend much more heavily on how quickly you report the problem.

What Counts as an Unauthorized Purchase?

Federal rules generally define unauthorized use as credit card use by someone who does not have actual, implied, or apparent permission to use the card and when the cardholder receives no benefit from the purchase. This can become important when a friend, relative, employee, or another person had permission to use the card.

A disagreement over a purchase is not always the same as credit card fraud. The card issuer may investigate whether the person had permission to make the charge.

What to Do After Finding Fraudulent Charges

Act quickly when you see a purchase you do not recognize. Contact the credit card company, report the card or account as compromised, and review recent statements for other unfamiliar purchases.

It is also important to dispute the charge in writing. To preserve billing-error rights, the Consumer Financial Protection Bureau says consumers should send a written notice within 60 calendar days after the disputed charge first appears on a statement. Keep copies of the dispute, statements, emails, and notes about calls with the card issuer.

What Happens While the Charge Is Disputed?

After receiving a proper written dispute, the credit card company generally has two complete billing cycles, but no more than 90 days, to investigate and resolve the issue. During that time, you generally do not have to pay the disputed amount or related charges.

You should still pay any other charges on the account that you do not dispute. The card issuer also cannot treat the disputed amount as late just because you did not pay it while the investigation is underway.

When Credit Card Fraud Causes Other Problems

Fraud can cause more than an unwanted charge. An unpaid fraudulent balance may lead to collection efforts or incorrect information on a credit report. Problems can become more serious if the card issuer decides the charge was authorized even though you say it was not.