I was recently pitched a guest post on the topic of fighting fraudulent credit card charges. This is an issue that I’ve had some experience with as well, so I was happy to agree. However, the post I received simply couldn’t meet my quality guidelines, so I’m writing about the topic myself!

There is no worse feeling than looking at your credit card or bank statement and seeing unauthorized charges. It could be a simple error or a sign of identity theft. Unfortunately, fraudulent or invalid charges aren’t a question of if they will happen but when they will happen. Professionals with cybersecurity degrees are constantly working on reducing fraud, but this crime is still on the rise.The key to getting through is to not panic and know your rights.
When dealing with unauthorized charges, it is important is to determine the nature of the charge. Charges from a store you’ve never shopped at can mean identity theft. Two identical charges are typically a simple clerical error.
How to correct duplicate charges and other errors related to authorized charges
Duplicate charges are probably the most common unauthorized charge. In most cases, this isn’t a matter of fraud but simple human error. From my experience, this seems to happen most often at restaurants. The server will swipe your card and the transaction may appear to not go through and they swipe it again.
I once had this happen to me while paying for a class reunion. I collected everyone’s payments and deposited them in my bank account and paid with my debit card. The bill was just under $400. The next day, I logged into my bank account and saw the payment listed twice and my bank balance perilously close to zero! This was back before my days of maintaining a buffer in my checking account. If I hadn’t been saving up for an upcoming move, I would have been overdrafted.
Duplicate charges aren’t the only errors you may deal with where there is an unauthorized charge paired with an authorized one. Sometimes the wrong amount can be charged. There may be a recurring fee that you didn’t want. These kinds of charges are indicators of more systematic problems with that merchant and they should probably be avoided in the future.
First steps:
Before you contact anyone, write down any information you need. At the very least, you will need the amount of the charges, whether it is currently listed as pending or posted, the time you were at the store/restaurant, and their phone number.
Call the merchant
First, try contacting the store where the charge occurred. Explain the situation to them. Any place that cares about customer experience, or at least about not getting bad media attention, will correct the situation for you by canceling one of the charges (if pending) or issuing a refund. If you can’t get anywhere with the store, then it is time to take the issue up with the bank or credit card issuer.
Call the bank
First, wait until the transaction is no longer pending. If you call while it is pending, they will respond that you need to wait until the transaction has posted. Duplicate charges are so frequent, and the merchant does usually catch and correct them, that they simply will not do anything until it has actually posted to your account.
But if it does clear and the merchant won’t respond, then call the bank to dispute the charge. Typically, they will issue a temporary refund and investigate your claim. The investigation can take up to thirty days at which time they will either rule in your favor and make the refund permanent, or rule against you and remove the refunded amount from your account.
When dealing with the reunion charge, I was originally unable to reach the restaurant and disputed the charge with the bank. During the investigation, however, the restaurant responded and refunded the second charge. I believe they also gave me a discount for the next time I ate there, but I moved 2 timezones away a week later. For a week’s time, I had an extra $400 in my account until the bank concluded their investigation and ruled in favor of the merchant, since the only remaining charge from the merchant at that time was, in fact, authorized.
How to correct fraudulent charges
If you ever see a charge from a merchant you don’t recognize, don’t panic. There can still be a valid reason. It is common for gas stations, and sometimes convenience stores and fast food restaurants, to have one name listed on their sign, but another name for their credit card merchant account.
After partnering with Shell for their gas stations, Schraeder’s Country Stores all go through as “SHELL”, even if the store doesn’t have a gas station attached. Many franchisees will charge card transactions under their company name instead of the franchise name. After eating at McDonald’s here in Fort Collins the first time, I was confused when I saw a charge from “McState Restaurants.”
To make the situation even more muddled, sometimes the transaction description won’t list the merchant name until the very end. When this happens, you will almost never see if from your bank’s mobile app, and it may be truncated beyond all understanding even on the bank website. When this happens, copy the merchant phone number listed.
First try searching Google. I do this for all numbers I don’t recognize. In nearly all cases, somewhere on the web, somebody has put a name to that phone number. If that doesn’t work, try calling the number and see if you can recognize who answers. If not, talking to them is your first step anyway.
Contact the merchant
Tell the merchant that you received a charge from their company but that you don’t recognize it. They may ask for the date and amount. So far, it isn’t necessarily identity theft. I once signed up for a 90 day trial for an offer from my bank. Forgot all about it and started getting charged 4 months later. If the transaction had the bank’s name, I may have remembered, but they actually contracted the service out to a third-party and was being charged by them.
If it is identity fraud, go ahead and tell them that you will be contacting your bank or card issuer. I don’t actually know how that works as far as the merchant and payment. I know you won’t be on the hook for charges if you respond in a timely manner, but the merchant has been defrauded in this case as well. I don’t know if they are stiffed for their money, or the bank eats the cost.
Contact the bank
Contact your bank or card issuer and explain to them that you believe your account may have been compromised. They will walk you through the steps of getting the issue fixed. New cards will be issued and you will be directed to change your online password. Depending on the nature of the attack, they may go as far as closing your old account and opening a new one.
Two years ago, my brother’s girlfriend’s sister stole the temporary checks associated with her checking account and withdrew over $500 while she was 2000 miles away. Chase refunded the money and opened a new account for her. The teller even waved all maintenance fees associated with the account because the free account she had previously was no longer available.
Contact the police
Any time somebody steals your identity, go to the police and file a police report. Some banks may require this as proof that the charges were not authorized. After you get a copy of the police report, make several copies and store them in case the issue comes up again later. It is probably a good idea to save several digital copies of the police report “in the cloud.”
My wife’s identity was stolen when she was 16. Somebody created a PayPal account with her name, collected $300 from a fake ebay auction and disappeared with the money. Twelve years later, Paypal closed her legitimate account (that she had opened 6 years earlier) until she paid back the $300 owed from the previous account. When she explained that her identity had been stolen and that account wasn’t hers, they asked for a copy of the police report. Of course, she didn’t still have it a decade, two time zones, and 4 moves later. To this day, she cannot use Paypal because of the issue.
Contact the credit reporting agencies
Hopefully, somebody only stole your account number and not other personal information needed to open new accounts in your name. Just in case, contact the three credit reporting agencies and place a temporary hold on your credit. This will block anyone (including you) from opening a new line of credit in your name.
Here are the contact pages for the three credit reporting agencies if you ever need to reach out to them to fight identity theft:
Next, request a copy of your credit report from each of the three credit reporting agencies. You can receive one for free if you have been the victim of identity fraud. Check for any accounts that you didn’t open yourself. If there are any, contact those issuers and explain that these were open fraudulently and offer to provide a copy of the police report. Meanwhile, dispute the information with the credit reporting agency.
Identity theft and unauthorized charges are not the end of the world. There are strong state and federal protections to help you. By keeping a calm head and systematically disputing the charges, you can eliminate the financial cost and minimize the disruption to your live.
Have you ever had your identify stolen or had incorrect charges? How did you deal with the situation?
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