What credit card fraud is and how to spot it
Credit card fraud happens when someone uses your card number, expiration date, or other card details to make purchases or withdrawals without your permission. The fraudster may have stolen your physical card, obtained your number from a data breach, or used skimming devices at gas pumps or ATMs. You are not responsible for unauthorized charges once you report them to your card issuer, but the faster you act, the easier the process becomes.
Watch for charges you do not recognize on your statement. These may be small test purchases (a few dollars) that fraudsters use to check if a card is active before making larger charges. You might also notice missing mail, unexpected credit card offers arriving in your name, or calls from creditors about accounts you never opened — all signs that someone may have your information.
Check your statements monthly, either online or by mail. Many people catch fraud within days of it happening because they review their account regularly. Set up account alerts through your card issuer's app or website so you receive notifications for large purchases or transactions in unfamiliar locations.
Key Takeaways
- Contact your card issuer when ready when you notice unauthorized charges; most banks have fraud departments available 24/7.
- You are not liable for fraudulent charges once reported, though your card will be cancelled and a new one issued.
- File a report with the Federal Trade Commission at IdentityTheft.gov to create an official record and receive a recovery plan.
- Place a fraud alert with the three credit bureaus (Equifax, Experian, TransUnion) to prevent fraudsters from opening new accounts in your name.
- Review your credit report for accounts you did not open, and dispute any fraudulent accounts with the bureaus directly.
when ready steps to take when you discover fraud
Call your card issuer's fraud department as soon as you notice unauthorized charges. The phone number is on the back of your card or in your online account. Tell them which charges are fraudulent and when you first noticed them. The representative will cancel your current card and order a replacement, which typically arrives within 5 to 10 business days.
Ask the card issuer to remove the fraudulent charges from your account. Once you report the fraud, you are protected under federal law and will not be charged for unauthorized transactions. The issuer will investigate and usually reverse the charges within one to two billing cycles. Request written confirmation of the fraud report for your records.
If your card was physically lost or stolen, file a police report with your local police department. Bring your card statement showing the fraudulent charges and any other evidence. You do not need a police report to dispute the charges with your bank, but having one creates an official record if the fraud is extensive or involves identity theft.
How to report fraud to the government and credit bureaus
File a report with the Federal Trade Commission at IdentityTheft.gov. This is a free government website where you create an account, describe what happened, and receive a personalized recovery plan. The FTC does not investigate individual cases, but your report becomes part of a national database that helps law enforcement track fraud patterns. You will receive a recovery plan with specific steps based on your situation.
Place a fraud alert with all three credit bureaus: Equifax, Experian, and TransUnion. A fraud alert tells lenders to verify your identity before opening new accounts in your name. You can place an alert by calling one bureau and they will notify the other two. The alert lasts one year and is free. If you believe your identity has been stolen (not just your card number), you may place an extended alert lasting seven years.
Request your free credit report from each bureau at AnnualCreditReport.com. Review the reports for accounts you do not recognize, unauthorized inquiries, or addresses you have never lived at. Dispute any fraudulent accounts directly with the bureau that is reporting them. Send a written dispute letter (email or mail) with copies of your evidence — your FTC report, police report, or bank statement showing the fraud.
Protecting yourself from future fraud
Use strong, unique passwords for your online banking and credit card accounts. A strong password has at least 12 characters and mixes uppercase and lowercase letters, numbers, and symbols. Do not use the same password across multiple sites. Consider using a password manager to store and generate passwords securely.
Enable two-factor authentication on your bank and credit card accounts. This requires a second form of verification (usually a code sent to your phone) when you log in from a new device or location. Even if a fraudster has your password, they cannot access your account without this second code.
Avoid using public Wi-Fi for banking or shopping. Public networks are easier for fraudsters to intercept. If you must use public Wi-Fi, use a VPN (virtual private network) to encrypt your connection. When shopping online, look for "https://" and a padlock icon in the address bar — these indicate the site is find.
Shred sensitive documents before throwing them away, including old statements, credit card offers, and bills. Fraudsters sometimes retrieve discarded mail to find account numbers or personal information. Sign up for paperless statements when possible to reduce the amount of mail containing your financial information.
What happens during the fraud investigation
Your card issuer will investigate the fraudulent charges, which typically takes 10 to 30 days. During this time, the charges remain on your account but are marked as disputed. You are not required to pay disputed charges while the investigation is ongoing. The issuer will contact you if they need additional information, such as confirmation that you were not in a certain location when a charge occurred.
Once the investigation concludes, the issuer will either remove the fraudulent charges or explain why they believe the charges were legitimate. If they remove the charges, the credit will appear on your account within one to two billing cycles. If they determine the charges were legitimate (which is rare once you have reported fraud), you have the right to dispute the decision in writing.
Keep records of all communications with your card issuer, including the date you called, the representative's name, and what was discussed. Save copies of your dispute letters, police reports, and the FTC report. These documents protect you if questions arise later about the fraud or if the same fraudster targets you again.
Different types of fraud and where they come from
Card-present fraud occurs when someone physically steals your card or uses a skimming device to copy your card information at a gas pump, ATM, or restaurant. Skimmers are small devices attached to card readers that capture your card number and PIN. To avoid this, inspect the card slot before inserting your card, cover the keypad when entering your PIN, and use ATMs in well-lit, monitored locations.
Card-not-present fraud happens online or over the phone when a fraudster uses your card number without having the physical card. They may have obtained your number from a data breach at a retailer or website, from a phishing email, or by purchasing stolen card numbers on the dark web. This type of fraud is the most common and accounts for the majority of credit card fraud cases.
Identity theft goes beyond a single fraudulent charge. A fraudster uses your personal information (name, Social Security number, date of birth) to open new credit card accounts, take out loans, or commit other crimes in your name. If you suspect identity theft, follow all the steps in this guide, including placing a fraud alert and reviewing your credit report regularly for new accounts.
Frequently Asked Questions
Am I responsible for paying fraudulent charges on my credit card?
No. Once you report unauthorized charges to your card issuer, you are protected under the Fair Credit Billing Act and are not liable for those charges. Your issuer will investigate and remove the fraudulent charges from your account. You may see the charges on your statement while the investigation is pending, but you do not have to pay them.
How long does it take to get my money back after reporting fraud?
Your card issuer typically completes the investigation within 10 to 30 days. Once they confirm the charges were fraudulent, the credit appears on your account within one to two billing cycles. In the meantime, you can use your replacement card or request a temporary card number from your issuer to make purchases.
What should I do if I see fraud on a credit card I no longer use?
Contact the card issuer when ready, even if the account is closed. Report the fraudulent charges and ask them to investigate. You are still protected under federal law for unauthorized charges, regardless of whether the account is active. The issuer will remove the charges and provide written confirmation.
Can I freeze my credit to prevent identity theft?
Yes. A credit freeze prevents lenders from accessing your credit report, which stops fraudsters from opening new accounts in your name. You can place a free credit freeze with each of the three bureaus (Equifax, Experian, TransUnion) through their websites. A freeze lasts until you remove it, unlike a fraud alert which expires after one year.
What if the same fraudster targets my card again after I report the first incident?
Report each instance of fraud to your card issuer when ready. Keep detailed records of all fraudulent charges and the dates you reported them. If fraud occurs repeatedly, ask your issuer about additional security measures or whether they recommend closing the account and opening a new one with enhanced protections.