How to Dispute Unauthorized Charges: Step-by-Step

Quick summary

If you see an unauthorized charge, act immediately: review the transaction, contact the card issuer or bank, freeze the account, and document everything. Consumer protections and timelines differ for credit cards and debit cards; following the right steps reduces your financial liability and improves the chance of a timely reversal. Authoritative resources: FTC (ftc.gov), CFPB (consumerfinance.gov) and IdentityTheft.gov.

Step-by-step action plan (first 24–48 hours)

1. Verify the charge. Check the transaction date, merchant name, location, and amount. Some merchant descriptors look unfamiliar but are legitimate (merchant parent names or payment processors). If it could be a family member or authorized user, confirm with them first.

2. Freeze or lock the card/account. Use your bank’s app or call customer service to temporarily lock or close the card to stop further charges.

3. Call the issuer immediately. Use the phone number on the back of the card or your online account. For credit cards, issuers typically provide zero-liability protection for fraudulent charges, but you must report quickly to trigger protections.

4. Follow up in writing if required. Under the Fair Credit Billing Act (FCBA), written disputes are important for some credit-card billing errors; send a written notice if requested by the issuer. Keep copies of everything.

5. Change passwords and secure accounts. Update passwords, enable two‑factor authentication, and review recent sign‑ins for accounts tied to payment methods.

Which rules apply to your situation (credit vs debit vs ACH)

• Credit cards (FCBA and card network policies): Credit cardholders generally have the strongest protections. Under the Fair Credit Billing Act, you normally aren’t responsible for unauthorized credit card charges if you report promptly; many card networks also offer zero-liability policies. The creditor must acknowledge disputes promptly and investigate within required timeframes (see “Timelines” below). Cite: CFPB and FTC.

• Debit cards (EFTA / Regulation E): Bank account withdrawals and debit card transactions are covered by the Electronic Fund Transfer Act. Liability depends on how quickly you report: report within 2 business days and your loss is capped at $50; after 2 days and before 60 days you could be liable for up to $500; after 60 days you may lose all recovery rights. Banks must investigate and—if necessary—provide provisional credit within certain timelines. Cite: CFPB (Regulation E guidance).

• ACH / bank transfers: Unauthorized electronic transfers or ACH debits also fall under Regulation E, but different forms and bank policies may apply. Immediate reporting is crucial.

Timelines and what to expect

• Credit-card disputes (FCBA): The creditor must acknowledge your dispute within 30 days and resolve it within two billing cycles (but not more than 90 days) after receiving your written complaint. (CFPB guidance)

• Debit-card disputes (Regulation E): If you report the loss within 2 business days after learning of it, your liability is limited to $50. If you report after 2 days but within 60 days of the statement containing the unauthorized transaction, you may face liability up to $500. If you wait more than 60 days, you risk losing the right to recovery. Banks generally investigate and must generally complete their investigation within 10 business days; if they need more time, they may take up to 45 days and must provisionally credit your account in some cases.

• Card network/merchant timelines: If an issuer elects to pursue a chargeback against the merchant, the merchant has its own window to respond. Chargeback resolution timelines depend on acquirers and payment processors.

Authoritative sources: Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC).

How to file the dispute (credit card vs debit)

1. By phone: Call your issuer’s fraud or customer service line to block further charges. Get a reference number and the representative’s name.

2. In writing (important for credit-card billing errors): Send a dispute letter by certified mail (if required by your issuer) that includes:

• Your name, address, and account number
• Date and amount of the unauthorized charge
• Why you believe the charge is unauthorized
• Copies (not originals) of supporting documents (statements, screenshots, merchant receipts)
• A clear request for investigation and credit for the disputed amount

Sample short dispute letter (adapt as needed):

[Your Name]
[Address]
[Account number last 4 digits]

[Date]

Re: Unauthorized charge posted on [date] for $[amount] from [merchant descriptor]

I did not authorize this transaction and request an immediate investigation and credit for the $[amount]. Enclosed are copies of my account statement showing the charge and other supporting documents. Please confirm receipt and provide a timeline for resolution.

Sincerely,
[Your name]

Keep copies of letters and proof of mailing.

Evidence and documentation to collect

• Account statements and transaction detail screenshots
• Any receipts showing you didn’t make the transaction (or showing you were elsewhere)
• Merchant communications (emails, subscription confirmations) if relevant
• Police report (if identity theft or large losses) and FTC IdentityTheft.gov report
• Correspondence with the issuer (dates, names, reference numbers)

Record the date and time of every call and the representative’s name. That record helps if you need to escalate.

If the issuer denies the claim or stalls: escalation steps

1. Ask for manager-level review. Request written explanation of the denial.

2. File a complaint with the Consumer Financial Protection Bureau (CFPB). CFPB accepts complaints about banks and credit card companies and can help mediate. (https://www.consumerfinance.gov/complaint/)

3. File a complaint with the Federal Trade Commission and create an identity theft report at IdentityTheft.gov if your personal information has been misused (FTC/IdentityTheft.gov).

4. Consider a police report for identity theft. Some issuers require a police report for identity-theft investigations.

5. If a merchant is uncooperative and you used a credit card, ask your issuer to pursue a chargeback. If you’re a small business hit by fraudulent customer transactions, consider tax and accounting impacts; see our article on Loss from Fraudulent Customer Transactions Deduction for bookkeeping and potential deductions: https://finhelp.io/glossary/loss-from-fraudulent-customer-transactions-deduction/.

6. For credit-impacting issues, use our Dispute Credit Report guide to remove fraudulent accounts and correct credit reports: https://finhelp.io/glossary/dispute-credit-report/.

Fraud types and tailored steps

• One-off fraudulent purchase: Report, freeze card, dispute, and let issuer reverse.
• Recurring subscription you didn’t authorize: Cancel the subscription with the merchant (if possible), then dispute the recurring charges with your card issuer and ask for a refund for unauthorized renewals.
• Account takeover: Change passwords, notify affected providers, file identity-theft report, and close or replace compromised accounts.
• Business card or merchant account fraud: Notify the bank and your payment processor immediately. Document losses and speak with your accountant about potential deductions (see link above).

Chargebacks vs disputes vs refunds (short clarifications)

• Refund: A merchant voluntarily returns money for a legitimate complaint.
• Dispute: You tell your card issuer the charge is unauthorized or incorrect; the issuer investigates.
• Chargeback: If the issuer finds for you, the issuer reverses the merchant’s payment (chargeback). A chargeback can be reversed if the merchant proves the charge was valid.

Prevention and ongoing monitoring

• Check statements weekly or set alerts for transactions over a small threshold.
• Use virtual card numbers or single-use card tokens for online purchases.
• Lock cards when not in use and enable transaction alerts and two-factor authentication.
• Periodically check your free annual credit reports and consider a fraud alert or security freeze if you suspect identity theft (IdentityTheft.gov and CFPB resources).

Common mistakes to avoid

• Waiting more than 60 days to report debit-card errors (Regulation E time limits).
• Relying only on phone reports and not following up in writing when required for credit-card disputes.
• Not keeping clear documentation of calls and emails.

When to get legal or professional help

• If an issuer refuses to investigate or you face significant losses, consult a consumer attorney experienced in financial disputes. I often recommend contacting a local consumer protection attorney if losses exceed a few thousand dollars and the issuer is uncooperative.

• Small businesses: speak with your CPA about tax treatment of fraudulent losses and potential deductions; see our business-focused guidance linked above.

Sample timeline for a typical credit-card dispute

Day 1: Discover charge, call issuer, freeze card.
Day 1–3: Submit written dispute (if required).
Day 30: Issuer should acknowledge dispute (per FCBA guidance).
Day 30–90: Investigation and resolution (two billing cycles or up to 90 days). If issuer finds in your favor, they issue credit; if not, they explain why.

Professional note

In my practice working with clients over 15 years, the cases with the best outcomes were those where the consumer acted within hours of seeing the charge, kept thorough records, and escalated quickly when the initial response was slow. Filing early, using written dispute letters when appropriate, and pushing for provisional credits are practical steps that materially improve recovery chances.

Sources and further reading

• Consumer Financial Protection Bureau (CFPB): guidance on disputing errors and Regulation E protections (consumerfinance.gov)
• Federal Trade Commission (FTC): consumer information on fraud and identity theft (ftc.gov)
• IdentityTheft.gov: how to report identity theft and create a recovery plan (IdentityTheft.gov)

Disclaimer

This article is educational and does not constitute legal or financial advice. For advice tailored to your circumstances, consult your card issuer, a qualified attorney, or a financial professional.