What Is the Best Way to Defend Against Fraudulent Charges?

Credit card fraud, which involves the unauthorized use of a credit card or its account information, presents a significant concern for consumers. This type of financial deception can manifest in various forms, from physical card theft to sophisticated digital breaches where account details are compromised. Given the widespread use of credit cards in daily transactions and online purchases, understanding how to address fraudulent activity has become increasingly important. Knowing the appropriate steps to take can help individuals mitigate potential financial losses and protect their financial well-being.

Immediate Actions Upon Detecting Fraud

Discovering an unauthorized charge on a credit card statement requires immediate attention to protect against further financial exposure. Gather all pertinent details: date, amount, merchant, and any other identifying information. Have personal account details like the full credit card number and security code ready to streamline reporting.

Contact the credit card issuer immediately. Their fraud department number is usually on the card or website. Clearly state you are reporting an unauthorized charge and provide the gathered transaction details. Prompt communication is essential for timely resolution.

Request a temporary hold or freeze on the compromised account to prevent further activity. Cancel the compromised card and arrange for a new one with a different account number. Swift action limits potential damage.

The Credit Card Dispute Process

After initial contact, consumers can formally dispute unauthorized charges. The Fair Credit Billing Act (FCBA) protects consumers regarding billing errors. Under this act, consumers have 60 days from the first statement containing the error to dispute the charge in writing. Liability for unauthorized use is limited to $50 if proper reporting procedures are followed.

Gather documentation to support your claim. This includes copies of communications with the issuer and records of genuine transactions. Evidence disproving the charge, like receipts for purchases elsewhere or travel itineraries, can also be helpful. Some issuers require specific forms, available online or by mail.

Submit the dispute via a formal written letter to the issuer’s billing error notice address or through their online dispute portals. The issuer must acknowledge the complaint within 30 days. They must investigate and resolve the dispute within two billing cycles, or 90 days. During investigation, the issuer often provides provisional credit for the disputed amount, applied within 5 to 10 business days.

The issuer may request additional information; respond promptly. The dispute outcome will either remove the charge if fraud is substantiated or uphold it if legitimate. If upheld, provisional credit may be reversed, and you will be responsible for the amount.

Protecting Against Future Fraud and Identity Theft

Beyond addressing immediate fraud, proactive measures protect against future financial threats and identity theft. Regularly monitor credit card statements and bank accounts for suspicious activity. Set up transaction alerts with financial institutions for immediate notifications, allowing quick detection of unauthorized use.

Review credit reports periodically to identify fraudulently opened accounts or other identity compromise signs. Consumers get a free credit report from Equifax, Experian, and TransUnion once every 12 months via AnnualCreditReport.com. A fraud alert on your credit reports signals creditors to verify identity before extending credit; these alerts last one year but can be extended. A credit freeze restricts access to your credit report, making it difficult for identity thieves to open new accounts; this is free with each bureau.

If fraudulent charges indicate identity compromise, report the incident to the Federal Trade Commission (FTC) via IdentityTheft.gov. The FTC provides a recovery plan and an official identity theft report, useful for businesses and law enforcement. Adopt secure online habits: use strong, unique passwords and enable multi-factor authentication. Exercise caution with public Wi-Fi and be wary of phishing attempts to reduce personal information compromise risk.

Citations

U.S. Bank. “Fair Credit Billing Act (FCBA) Explained”. Accessed August 21, 2025.

Consumer Financial Protection Bureau. “Fair Credit Billing Act”. Accessed August 21, 2025.

Experian. “What Is Provisional Credit?”. Accessed August 21, 2025.

AnnualCreditReport.com. “Get your free credit report”. Accessed August 21, 2025.

Federal Trade Commission. “Fraud Alerts and Credit Freezes”. Accessed August 21, 2025.

IdentityTheft.gov. “Report Identity Theft”. Accessed August 21, 2025.