Know Your Rights When Facing Credit Card Fraud

Credit card fraud is one of the most common forms of identity theft, with over 449,000 cases reported in 2024, according to the Federal Trade Commission’s (FTC) most recent database. Fortunately, tools like two-factor authentication, credit freezes, digital wallets and virtual cards help protect your accounts. If fraud does occur, you’re protected under the Fair Credit Billing Act (FCBA) and most issuers’ zero-liability policies, which shield you from paying for unauthorized charges. Here’s how to use those protections and restore your finances if you fall victim.

Spotting credit card fraud

Regularly reviewing your credit card transactions — whether through a mobile app, online account, or monthly statement — is one of the most effective ways to catch credit card fraud early. In some cases, your issuer may detect suspicious activity before you do, sending mobile alerts to confirm recent charges. These alerts may be triggered by large or unusual purchases and don’t always indicate fraud, but help ensure the activity is legitimate. If the issuer suspects fraud, they may temporarily lock your card until you confirm the transaction, helping to stop additional unauthorized charges. While these security measures can be inconvenient, they’re key to protecting your account.

Reporting credit card fraud

If you notice fraudulent charges on your credit card, here’s what you can do to report the charges and protect yourself:

• Check all three of your credit reports to see if a new, unfamiliar account has been opened in your name. This helps you spot potential fraud, know when the account was opened, view the amount due and establish a documented trail to protect yourself.
• Notify your credit card issuer immediately. Start by calling the number on the back of your credit card. From there, you should get more detailed information on what to do next.
• Change your passwords. After you discuss the fraud with your credit card issuer, it’s a good idea to change the passwords on your credit card accounts. You may also want to change the passwords associated with online banking, online shopping, email accounts and so on.
• Send your dispute statement, if necessary. If your credit card issuer requests a dispute statement, use the FTC’s dispute letter template to craft your dispute. Then, submit the letter to your credit card issuer as directed — either by mail or online.
• Continue making payments on your credit cards. While credit card issuers cannot try to collect payment, charge interest or report any late payments on disputed charges, you’ll still need to make regular monthly payments on any other outstanding credit card balances.
• Wait for your new credit card to arrive. If there is any potential evidence of fraud on your account, your credit card issuer should send you a new credit card with a new 16-digit credit card number. You may receive an instant-use credit card that allows you to make online purchases and use digital wallets while you wait for your physical card to arrive in the mail.
• Update your accounts with your new credit card number. Once you have your new credit card number, you may need to update accounts with utility providers, online retailers, subscription services and so on. If you haven’t already updated your digital wallet, you’ll want to do so now as well.

Are you liable for fraudulent credit card charges?

Many credit card issuers offer zero-liability fraud protection if you report unauthorized charges within 30 days, meaning you won’t owe anything. Under the Fair Credit Billing Act, your liability is capped at $50 if you report the fraud within 60 days of receiving your credit card statement (which means that even if your credit card issuer doesn’t offer zero-liability protection, you won’t owe more than $50). However, if you miss these deadlines, you may be responsible for the full amount.

Protecting yourself from credit card fraud

There are a few ways you can protect your account from credit card fraud, such as:

• Freezing your account
  

  One of the best ways to protect yourself from credit card fraud is by freezing your credit. While your credit is frozen, it is impossible to open new credit cards, take out new loans or apply for new lines of credit under your name.

  Each of the three major credit reporting bureaus (Experian, TransUnion and Equifax) allows you to freeze your credit for free, and you’ll need to unfreeze your credit when it’s time to apply for a new credit card or take out other forms of credit.

• Place a fraud alert
  

  You have the right to place a fraud alert on your credit report. This lets creditors know that if someone applies for credit in your name, they should take steps to verify whether it is indeed you. If you place a fraud alert with one of the three credit bureaus, it will automatically update the other two bureaus with the fraud alert request.

• Enroll in a credit monitoring service
  

  Consider signing up for a credit monitoring service that can track not only your credit reports and credit score, but also potentially fraudulent activity and situations in which your personal information may have been compromised.

Do you need to file an identity theft report?

If you’re a victim of credit card fraud, consider filing an identity theft report with the FTC. After you file the report with the FTC, send it to the credit bureaus along with proof of your identification and a letter explaining the fraudulent charges to the credit bureaus to help block inaccurate information. Once received, the bureaus will notify lenders, preventing the debt from going to collections, and will investigate to remove the fraud from your credit history.

The bottom line

If your credit card has been used fraudulently, you have rights. Reporting credit card fraud within 60 days limits your liability and helps you get your finances in order as quickly as possible. Start by contacting your credit card issuer, and consider changing your passwords, freezing your credit and signing up for a credit monitoring service to prevent future attempts at fraud.