Under the U.S. Fair Credit Billing Act (FCBA), implemented through Regulation Z § 1026.13, an unauthorized credit card charge qualifies as a "billing error." This triggers a requirement for your credit card issuer to conduct a reasonable investigation. If the issuer confirms the error, it must correct the statement within the time limits set in § 1026.13(c)(2). This process applies to U.S. credit card accounts and protects against charges you did not make or authorize. It does not cover debit cards, prepaid cards, or disputes over the quality of goods or services you accepted.
To start, notify your issuer promptly about the unauthorized charge, providing details from your statement. Gather evidence like the billing statement showing the charge. The issuer handles the investigation; if unsatisfied, escalate via CFPB or FTC complaint channels while keeping all records. This FCBA process differs from merchant refunds or other payment disputes.
What the FCBA Says About Unauthorized Charges
Regulation Z § 1026.13 defines a billing error to include "a reflection on or with a periodic statement of an extension of credit that is not made to the consumer or to a person who has actual, implied, or apparent authority to use the consumer's credit card or open-end credit plan." This covers unauthorized charges directly.
Once notified, the issuer must conduct a reasonable investigation. Examples of appropriate steps include reviewing transaction details for authorization. If the issuer determines a billing error occurred as asserted, it corrects the account within the time limits in § 1026.13(c)(2). These rules stem from official CFPB and FTC guidance and apply to open-end credit plans like credit cards.
What Does Not Control Unauthorized Charge Disputes
The FCBA process excludes disputes relating to the quality of property or services that the consumer accepts, per § 1026.13(a)(3). If you received and accepted the item, a quality issue does not qualify as a billing error.
This differs from merchant refund policies, EFT/ACH disputes under Regulation E, or state consumer laws. Card network rules (Visa, Mastercard) or issuer-specific policies may provide additional procedures but do not replace FCBA requirements. Stick to credit card billing error notices for unauthorized charges.
Practical Next Steps to Dispute
Contact your card issuer by phone or in writing to report the unauthorized charge as a billing error. Reference the specific charge on your statement and state it was not authorized by you or anyone with authority. Provide your account number, the date, amount, and merchant details.
Gather supporting evidence:
- Copy of the billing statement highlighting the charge.
- Any related communications or lack thereof confirming non-authorization.
- Records of your notification to the issuer (date, method, representative name).
The issuer investigates; track their response. If denied or unresolved, file a complaint with the CFPB or FTC. Retain all correspondence for potential escalation.
| Step | Action | Evidence Needed |
|---|---|---|
| 1. Notify Issuer | Phone or written notice of billing error | Statement copy, charge details |
| 2. Issuer Investigates | Await reasonable investigation | N/A (issuer duty) |
| 3. Correction if Confirmed | Issuer adjusts statement | Per § 1026.13(c)(2) timelines |
| 4. Escalate if Needed | CFPB/FTC complaint | All prior records |
FAQ
What counts as an unauthorized charge under FCBA?
A billing error under § 1026.13(a)(1): an extension of credit not made to you or an authorized person.
Does my issuer have to remove the charge automatically?
No. The issuer must conduct a reasonable investigation and correct only if it confirms the error.
Can I dispute if I accepted the item but it was charged without permission?
Yes, if unauthorized under the billing error definition. It excludes quality disputes for accepted goods/services.
What if the issuer denies my dispute?
Keep records and file complaints with CFPB or FTC for further review.