What to Do If a Merchant Charges You Fraudulently

Quick overview

If a merchant bills you for something you didn’t buy, act quickly. The faster you document the issue and notify the merchant and your bank, the better your legal protections and chances of getting money back. Federal rules give credit-card holders and debit-card users different protections and deadlines; card networks and issuers also offer chargeback procedures that often resolve disputes faster than formal legal steps. (See the Consumer Financial Protection Bureau and FTC guidance below.)

Step-by-step action plan (what to do now)

1. Pause and gather evidence

• Take screenshots of the transaction in your online account, the merchant’s receipt, order confirmations, shipping records, and any emails or chat messages.
• Note the date the charge first appeared on your statement and the exact description shown on your card statement.

1. Contact the merchant first (documented attempt)

• Call or email the merchant, explain the error, and request a refund. Many disputes are clerical errors or duplicate charges that the merchant will correct quickly.
• Keep records: note the representative’s name, time/date of the call, and any case or reference number.
• If the merchant refuses or does not respond within a few days, move to step 3.

1. Contact your card issuer or bank immediately

• For credit cards: you can dispute billing errors under the Fair Credit Billing Act (FCBA). Report the issue to your issuer’s customer service and follow their dispute process. You may also send a written dispute to trigger FCBA protections (see template below).
• For debit cards: the Electronic Fund Transfer Act (EFTA) governs unauthorized electronic transfers. Your liability and timelines depend on how quickly you report the error. (See CFPB consumer guide.)
• Ask your issuer to place a hold or provisional credit while they investigate.

1. File a formal dispute or chargeback

• Most card networks let the cardholder request a chargeback; your issuer will start an investigation. Provide your supporting documents.
• Keep copies of everything. Note the dispute reference number and the expected timeline.

1. Escalate if needed

• If the bank denies the dispute, ask for the exact reason and the documentation used to decide. You can appeal or supply additional evidence.
• File complaints with the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), and your state attorney general’s consumer protection office if the merchant engages in persistent deception.

1. If identity theft is suspected

• Place a fraud alert or credit freeze with the three major credit bureaus (Equifax, Experian, TransUnion).
• File an Identity Theft Report via IdentityTheft.gov and notify your issuer and law enforcement if appropriate.

1. Keep monitoring accounts

• Continue checking statements and set up transaction alerts on your accounts.

Timelines and legal protections (what to expect)

• Credit-card disputes (FCBA): Under the Fair Credit Billing Act, you generally must send a written notice to your card issuer within 60 days after the issuer mailed the first bill containing the error to limit liability for billing errors. In practice, most issuers accept disputes by phone or secure message then follow up in writing; still, act within 60 days of the statement date. (Consumer Financial Protection Bureau, https://www.consumerfinance.gov)

• Debit-card disputes (EFTA): Protections depend on how quickly you report the unauthorized transfer. If you notify your bank within 2 business days after learning of the loss or theft, your maximum liability is $50; if you report it between 3 and 60 days, you could be liable for up to $500; waiting more than 60 days may leave you liable for unlimited losses. These limits and timelines are described by the CFPB and the Federal Trade Commission. (Consumer Financial Protection Bureau, https://www.consumerfinance.gov; FTC, https://www.ftc.gov)

• Chargebacks: A chargeback is a merchant reversal initiated by the cardholder’s bank through the card network. The time to resolution varies but many disputes resolve in 30–90 days. Card networks (Visa, Mastercard, AMEX) and issuers have their own procedural rules and evidence requirements.

Chargeback vs. bank dispute vs. merchant refund — when to choose each

• Try the merchant refund first. It’s fastest and preserves business relationships when appropriate.
• If the merchant refuses or you suspect fraud, file a chargeback or dispute with your issuer. For guidance on when to seek a chargeback versus other dispute routes, see our article: When to Seek a Chargeback vs a Bank Dispute.

Evidence that strengthens your case

• Order confirmations, tracking numbers, screenshots of product pages and terms, proof of cancellation, email/chat transcripts, and photos (for wrong or damaged items).
• Bank/merchant communications showing refusals or contradictory claims.
• For recurring charges, proof you canceled before the next billing cycle.

Sample written dispute (credit card — FCBA-friendly)

Use this format if your issuer asks for written notice. Send via certified mail when possible and keep a copy.

[Your name]
[Your address]
[Account number]
[Date]

I am writing to dispute a billing error in the amount of $[amount] on my account. The amount is incorrect because [brief explanation: e.g., I did not receive the goods; I was charged twice; the amount is higher than agreed]. The charge appeared on my statement dated [statement date] and is listed as [merchant name and transaction description]. Enclosed are copies of supporting documents.

Please investigate and correct the error as required under the Fair Credit Billing Act.

Sincerely,
[Your signature]

If the merchant refuses a refund or claims a different policy

• Preserve all communications and escalate the dispute with documentation to your issuer. If the denial seems unfair or deceptive, our guide on What to Do If a Merchant Refuses a Refund: Consumer Remedies explains legal and administrative next steps, including filing complaints with state agencies.

When to involve law enforcement or file an identity-theft report

• File a police report if you suspect criminal fraud (stolen card, account takeover, or clear scams).
• If your name is being used to open accounts or make purchases, file an Identity Theft Report at IdentityTheft.gov and use that report when disputing fraudulent charges and contacting credit bureaus.

Costs, outcomes, and common reasons disputes fail

• Most disputes result in provisional credit until the investigation ends. If the issuer decides for the merchant, the provisional credit may be reversed.
• Disputes can fail if you lack documentation, if the merchant proves the charge was authorized, or if you missed legal timelines. Keep careful records and follow the issuer’s process closely.

Practical tips from experience

• I recommend setting up transaction alerts so you see charges in real time. In my practice helping clients, early detection (within days) typically leads to faster resolution and lower hassle.
• Use a single, organized folder — digital or physical — with screenshots, emails, and reference numbers to present a clean case to the issuer.
• For recurring subscriptions, cancel directly with the merchant and keep confirmation to avoid future unauthorized renewals; if charged after cancellation, use that confirmation as evidence.

Useful federal resources and where to file complaints

• Consumer Financial Protection Bureau — how to dispute a credit card charge and step-by-step guidance: https://www.consumerfinance.gov
• Federal Trade Commission — identity theft and consumer complaints: https://www.ftc.gov
• Annual Credit Report — monitoring your credit report: https://www.annualcreditreport.com

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/
• What to Do If a Merchant Refuses a Refund: Consumer Remedies: https://finhelp.io/glossary/what-to-do-if-a-merchant-refuses-a-refund-consumer-remedies/

Final notes and disclaimer

This article explains common steps and federal protections for disputing merchant charges. It is educational and not legal advice. For complex cases, ongoing fraud, or large-business disputes, consult a consumer-attorney or a qualified financial advisor. Information is accurate as of 2025 and based on federal consumer-protection guidance (CFPB, FTC) and common card-issuer practices.