What Are My Rights for Unauthorized Charges on My Credit Card?


When someone uses another person's credit card without his permission, he is essentially making loans using the card holder's line of credit. This constitutes a form of identity theft and financial fraud, one for which the unauthorized card holder can be criminally charged. Fortunately for the card holder, under U.S. law, he cannot be held responsible for the unauthorized charges and will have to pay a maximum of $50.

Reporting Unauthorized Charges

In order for a card holder to receive consumer protection, he must first report the unauthorized use of his card. The exact time period during which a person must make this report varies by state. The person must report the theft to the company that issued the card and, if he chooses, to his state's attorney general's office. Once he reports the unauthorized use of the card, the card may be frozen or the account closed, depending on if he retains possession of the card.


Under U.S. law, a card holder can only be held responsible for a maximum of $50 worth of unauthorized charges on the card if he reports the incorrect charges within a certain amount of time after they were made. Depending on how the charges were incurred, the party responsible for covering the damages will either be the retailer to whom the charges were made or the finance company that issued the card.


If a person notices errors on his credit card statement, such as charges that may not be the product of fraud, only of error, he is responsible for reporting them to the credit card company as well. According the Federal Trade Commission, credit card companies are responsible for verifying all credit card statements and must correct any errors that appear on them. In some cases, a card holder may have to write a letter to the company to get it to make a change.

Credit Score

In addition, the person's credit score will not be affected by the unauthorized charges. However, this does not mean that the unauthorized charges will not initially be listed on the card holder's credit report. If the charges are incorrectly listed, then the person should report the error to a credit reporting agency. The agency is legally required to make sure the information on the report is correct and will fix the error.

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