Common Examples of Unauthorized Credit Card Transactions and Bank Liability Under the Fair Credit Billing Act

By: Robert J. Nahoum

The Fair Credit Billing Act (FCBA) is a vital federal consumer protection law that shields consumers from unfair credit card billing practices, including unauthorized transactions. If you find unfamiliar charges on your credit card statement, the FCBA provides important protections and a procedure to dispute those charges, potentially resulting in bank liability for the disputed amounts.

Common Examples of Unauthorized Credit Card Transactions

Unauthorized credit card transactions under the FCBA typically involve:

Charges made by someone who is not authorized to use your credit card
Fraudulent purchases resulting from stolen credit card information
Charges for goods or services that you never received
Duplicate charges or errors in the billed amount

How FCBA Lawsuits Work

If you discover an unauthorized charge, the FCBA mandates that you notify your bank in writing within 60 days of the date the billing statement was mailed containing the error. Your dispute should include your name, account number, the amount in question, date of the transaction, and a description of why you believe the charge is unauthorized. Supporting documents can strengthen your claim.

Once a dispute is received, the bank must acknowledge it within 30 days and finalize an investigation within two billing cycles (no more than 90 days). During this time, the bank cannot attempt to collect or report the disputed amount to credit bureaus as delinquent. If the bank verifies the error, they must correct your account and remove the unauthorized charge.

If the bank denies the dispute or fails to follow FCBA procedures, consumers can file a lawsuit. FCBA lawsuits typically seek to hold banks liable for failure to investigate, improper billing, or refusal to correct errors. Courts may award damages if the consumer prevails.

Damages Consumers May Recover Under FCBA

Consumers aggrieved by unauthorized credit card transactions and bank violations under the FCBA may recover:

Removal of the disputed charge from their credit report
Refund of any money paid for the unauthorized charge
Actual damages
Statutory damages up to $1,000
Reasonable attorney’s fees and costs if the consumer’s lawsuit is successful

If you believe you are the victim of unauthorized credit card transactions or unfair billing practices, it is important to act quickly and assert your rights under the FCBA to minimize your liability and protect your credit. The Law Offices of Robert J. Nahoum, P.C. can assist with disputes and litigation to ensure you receive the full protections and remedies afforded by law.