Quick overview
When a merchant posts an unauthorized fee, act quickly and methodically. The sooner you identify the charge, document evidence, and follow the correct dispute channel, the higher the chance of a full refund and reduced exposure to additional fees or liability.
Below you’ll find a practical, step-by-step guide to common recourse options, timelines, templates you can use, escalation paths, and professional tips I use in my work advising clients on billing disputes.
Why this matters
Unauthorized fees—from surprise subscription renewals to overstated shipping or add-on charges—can cost individuals and small businesses hundreds or thousands of dollars over time. Beyond the direct cost, unresolved charges can cause overdrafts, credit-card balances, and stress. Federal protections like the Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA, implemented via Regulation E) provide important legal backstops, but the practical path to recovery usually starts with documentation and a clear dispute.
Authoritative resources: Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) offer consumer-facing guidance on disputing charges and filing complaints (see: https://www.consumerfinance.gov and https://www.ftc.gov).
Step-by-step recourse options
1) Verify and document the fee
- Confirm the transaction: date, amount, merchant name as it appears on the statement, payment method (credit card, debit, ACH, PayPal).
- Save evidence: screenshots of merchant pages, subscription confirmation/cancellation emails, receipts, chat logs, and the relevant bank or card statement showing the charge.
- Note timelines: when you first noticed the charge and when you contacted the merchant.
Why this matters: evidence is the central factor a bank, card network, or regulator will use to decide a dispute.
2) Contact the merchant first
- Call or email customer service with a clear, calm statement: you do not recognize or did not authorize the fee and you want a refund. Ask for a confirmation number and the representative’s name.
- If the merchant is uncooperative, request a supervisor and note the refusal.
Pro tip from my practice: merchants often reverse legitimate mistakes quickly if you give them one chance — keep calls short and factual and follow up with an email summarizing the call.
3) File a chargeback or dispute with your card issuer or bank
- Credit cards (FCBA): You typically have 60 days from the date the issuer sent the billing statement containing the error to send a written dispute. Card issuers also accept online dispute forms and phone calls; follow up in writing if your issuer requires it. (See CFPB guidance.)
- Debit/ACH/electronic transfers (EFTA/Regulation E): Protections and liability differ from credit cards. You should report unauthorized electronic transfers promptly—reporting within two business days of learning of the loss generally limits your maximum liability to $50; reporting between two and 60 days can raise that cap to $500; waiting more than 60 days risks losing protection. (See CFPB on Regulation E.)
Note: card-network and issuer rules vary. Some disputes require evidence within set windows; many card networks and banks accept disputes for billing errors for at least 60–120 days, but the exact window depends on the network, merchant type, and card agreement.
4) Escalate with regulators if needed
- File a complaint with the Consumer Financial Protection Bureau (CFPB) when the bank or payment service fails to resolve a dispute: https://www.consumerfinance.gov/complaint/.
- Report deceptive merchant practices or unfair billing to the Federal Trade Commission (FTC) at https://www.ftc.gov or your state Attorney General.
5) Consider small claims or other legal remedies
- If the dollar amount justifies it and other attempts fail, small-claims court can be an efficient, low-cost option. Track costs (filing fees, time) and be sure your documentation is complete.
Practical timelines to keep on your radar
- FCBA (credit-card billing error disputes): generally 60 days from the date the issuer sent the statement showing the error to submit a written dispute. (CFPB)
- EFTA / Regulation E (unauthorized electronic transfers): reporting quickly is crucial—2 business days limits liability to $50; reporting within 60 days may increase liability; after 60 days you may be exposed to full loss. (CFPB)
- Chargebacks: many card networks and issuing banks have windows commonly between 60 and 120 days for initiating a chargeback; confirm with your issuer for exact timing.
Documentation checklist (what to collect before you escalate)
- Copy of the bank or card statement with the disputed line item highlighted.
- Any merchant communications (emails, chat transcripts, cancellation confirmations).
- Receipts, order confirmations, screenshots of your merchant account showing cancellations or lack of enrollment.
- A timeline of events with dates, times, and names of representatives you spoke with.
- Evidence of fraud if available (unauthorized access notifications, police report if identity theft is suspected).
How to word your dispute (short templates)
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Email subject: “Unauthorized charge on account ending XXXX — request for refund”
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Short email body (to merchant):
“Hello — I noticed a charge on [date] for [amount] from [merchant name] on my [card/account ending XXXX]. I did not authorize this charge and did not receive the goods/services billed. Please reverse this charge immediately and confirm in writing. I will escalate to my bank and file complaints with regulators if we cannot resolve this promptly. Thank you, [Your Name, contact info].” -
Written dispute letter to card issuer (brief):
“I am writing to dispute a billing error on my account #[account number]. The statement dated [date] shows a charge from [merchant name] for [amount] that I did not authorize. Attached are copies of supporting documents. Please investigate and correct the billing error under the Fair Credit Billing Act. Sincerely, [Name/Address/Phone].”
When to use a chargeback vs. a bank dispute or refund route
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If the merchant is cooperative and the issue is a merchant error (billing mistake, duplicate charge), requesting a refund directly is often fastest.
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If the merchant refuses or is unreachable, start a dispute or chargeback through your card issuer or bank. See our guide on When to Seek a Chargeback vs a Bank Dispute for differences and practical advice.
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For recurring subscription traps or unauthorized recurring billing, our article on Avoiding Subscription Traps: How to Cancel and Get Refunds explains cancellation evidence that strengthens disputes.
How to escalate with your bank effectively
- Follow your issuer’s process exactly (online dispute forms, secure messages, certified mail when requested).
- Keep a dispute folder and follow deadlines — if you file by phone, ask how to confirm the dispute in writing. If the bank denies your claim, request the reason in writing and the documentation they used.
For an escalation playbook, see our step-by-step on How to Escalate a Billing Dispute with Your Bank.
Common mistakes and how to avoid them
- Waiting too long: missed timelines can forfeit legal protections.
- Insufficient documentation: save everything; even a short message thread can prove cancellation.
- Overlooking debit protections: many consumers assume debit cards have the same protections as credit cards — they don’t. Act faster with debit/ACH issues.
- Multiple disputes for the same charge: coordinate channels. If you start a chargeback and separately file a complaint without notifying the issuer, it can complicate the process.
Real-world examples (anonymized)
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A consumer saw a $129 subscription renewal they never authorized. The merchant initially refused to refund. After the consumer forwarded cancellation emails and a chat transcript, the merchant reversed the charge. When the merchant stalled, the cardholder opened a dispute; the issuer provisionally credited the account pending investigation and later returned the funds permanently.
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Small business: recurring SaaS fees continued despite cancellation attempts. The owner had email cancellation proof and a screenshot of the disabled account. The bank issued a chargeback and the merchant eventually accepted the reversal to avoid escalating to the card network.
When to involve law enforcement or consider identity theft
- If you suspect account takeover or identity theft, file a police report and place a fraud alert or credit freeze with the credit bureaus. Notify your bank immediately. Check the FTC’s identity theft resources at https://www.identitytheft.gov.
Final professional tips
- Regularly reconcile accounts and set calendar reminders to review statements monthly.
- Keep a standard dispute packet template you can adapt quickly when you spot an unauthorized fee.
- If the dispute is large or complex, consult a consumer attorney — the cost can be justified by the potential recovery.
Disclaimer
This content is educational and not legal advice. Remedies and timelines can vary by account terms, card network rules, and state law. For personalized legal or financial advice, consult a licensed attorney or your financial institution.
Authoritative resources
- Consumer Financial Protection Bureau (CFPB): https://www.consumerfinance.gov
- Federal Trade Commission (FTC): https://www.ftc.gov
- IdentityTheft.gov (FTC resource for identity theft): https://www.identitytheft.gov
Related FinHelp guides
- When to Seek a Chargeback vs a Bank Dispute: https://finhelp.io/glossary/when-to-seek-a-chargeback-vs-a-bank-dispute/
- How to Escalate a Billing Dispute with Your Bank: https://finhelp.io/glossary/how-to-escalate-a-billing-dispute-with-your-bank/
- How to Dispute Unauthorized Charges: Step-by-Step: https://finhelp.io/glossary/how-to-dispute-unauthorized-charges-step-by-step/
