How to Handle Fraudulent Charges: Legal Steps You Can Take

5 January 2026

We've all felt that gut-wrenching moment—you're sipping your coffee, scrolling through your bank statement, and there it is—a weird, unexpected charge. You don't recognize it. Maybe it’s a tiny $4.95 transaction or a $400 shopping spree in a city you've never been to. Either way, panic sets in. Are you dealing with a fraudulent charge?

First off, take a deep breath. You’re not alone. Financial fraud is more common than you think, and the good news? You’ve got rights, and there are clear legal steps you can take to protect yourself and your money.

In this article, we’ll walk you through exactly how to handle fraudulent charges like a pro. We'll keep things simple, relatable, and yes—actionable. Because nobody has time for financial drama.

What Exactly Is a Fraudulent Charge?

Let’s start with the basics. A fraudulent charge is any transaction made on your credit card, debit card, or bank account that you didn’t authorize. This could be:

- A charge made with a lost or stolen card.
- An online purchase made with your card details.
- A subscription service you never signed up for.
- A charge from a merchant you’ve never interacted with.

Fraud isn’t always someone hacking your account from halfway across the globe. It could be a sketchy subscription tucked away in the fine print or someone skimming your card at a gas pump.

So, you're not overreacting—it's shady business, and you need to act fast.

Step 1: Review the Charge Carefully

Now, before you call your bank with fire in your eyes, give the transaction a second look. Sometimes, businesses have weird billing names that don’t match their storefront.

Ask yourself:
- Did I recently buy something online that might show up under a different name?
- Is this a recurring subscription I may have forgotten about?
- Is this a pending charge that might resolve in a day or two?

Take a few minutes to Google the merchant name and check your email for receipts. If you still come up blank—it’s likely fraud.

Step 2: Call Your Bank or Card Issuer Immediately

Time is everything when it comes to fraud. As soon as you’re sure the charge is fake, grab your phone and call your bank or credit card company.

Here’s what to do on the call:
- Explain that you’ve spotted a charge you didn’t authorize.
- Tell them the amount and the date.
- Ask them to freeze or cancel the affected card immediately.

They’ll likely cancel your current card and issue you a new one. Some banks even offer temporary virtual cards to use while you wait for the physical one to arrive.

Heads up: If you're using a debit card, this process might take longer—and chances are, you’ll have to wait to get your money back. Credit cards usually offer more fraud protection.

Step 3: Dispute the Charge

Once you’ve reported the fraud, you’ll need to file an official dispute. This is where things get a little legal—but don’t worry, it’s not as intimidating as it sounds.

You can usually do this:

- Online through your bank’s website or app
- Over the phone
- By filling out a dispute form and submitting it via email or mail

What you’ll need:
- The transaction details (date, amount, merchant)
- A statement that confirms you didn’t authorize the charge
- Any supporting documents (screenshots, emails, etc.)

Under the Fair Credit Billing Act (FCBA), credit card users are protected and not liable for more than $50 in unauthorized charges—which means in many cases, you won’t have to pay anything out of pocket.

Debit cards, however, fall under the Electronic Fund Transfer Act (EFTA), which has slightly different rules and stricter time limits.

👉 Pro Tip: You typically have 60 days from the date of your statement to dispute a credit card charge. With debit cards, report any issue within two business days to limit your loss to $50. Wait longer, and your liability could increase.

Step 4: File a Police Report If Necessary

Now, you might be wondering—do you really need to call the cops?

Here’s the deal: If your personal information was stolen, or you’ve been the victim of identity theft, filing a police report adds a layer of legitimacy to your case.

This step becomes valuable when:

- You need documentation for your bank or insurance company.
- You want to help authorities catch the person behind the scam.
- You have ongoing issues with fraud.

The report doesn’t need to be long or complicated. Just be honest and detailed. Bring any proof you have: statements, screenshots, receipts, etc.

Step 5: Report to the Federal Trade Commission (FTC)

The FTC might sound like a faceless government agency, but they’re actually a pretty helpful ally in fraud cases. They collect complaints and use them to go after shady businesses and cybercriminals.

Here's how to report:
- Visit IdentityTheft.gov or ReportFraud.ftc.gov
- Fill out the simple online form
- Save the confirmation for your personal records

This is especially important if you believe your identity has been compromised. The FTC will generate a personalized recovery plan—which is pretty awesome, honestly.

Step 6: Monitor Your Credit Report

Let’s face it—fraud rarely stops at one weird charge. If someone got ahold of your financial info, there’s a chance they could try to open new accounts in your name.

That’s where your credit report comes in.

Under federal law, you can check your credit reports for free at AnnualCreditReport.com from all three major bureaus: Equifax, Experian, and TransUnion.

Look for:
- Accounts you didn’t open.
- Credit inquiries you didn’t authorize.
- Any suspicious activity or addresses.

If you spot any funny business, go ahead and file a dispute with the credit bureau and possibly freeze your credit.

Step 7: Place a Fraud Alert or Credit Freeze

To go full-on Fort Knox with your identity, you can place a fraud alert or even freeze your credit.

Fraud Alert:

- Free and easy to set up
- Alerts lenders to take extra steps to verify your identity
- Lasts for 1 year (renewable)
- You only need to contact one bureau; they’ll notify the rest

Credit Freeze:

- Completely locks down your credit file
- Stops anyone from opening new accounts in your name
- Free to place and lift (by law)
- Slightly more hassle if you need to apply for new credit

If you're not planning on opening new credit accounts anytime soon, a freeze gives you peace of mind like nothing else.

Step 8: Keep Everything Documented

You know that old saying—“CYA” (Cover Your Assets)? Yeah, you'll want to live by that here.

Keep a folder (digital or physical) with everything related to the fraud:
- Emails to/from your bank
- Dispute forms
- Police report copies
- FTC confirmation
- Notes from phone calls

Trust me—it’ll save you a ton of time if the issue drags on or escalates.

Step 9: Learn and Prevent Future Fraud

Everyone makes mistakes. Maybe you clicked on a sketchy link, or your info was part of a data breach. What matters most is learning from it and tightening up your defenses.

Here are a few simple DIY fraud prevention tips:
- Use strong, unique passwords (and a password manager).
- Enable two-factor authentication wherever possible.
- Avoid public Wi-Fi for anything money-related.
- Review your statements weekly like it’s your mini financial health check.
- Shred financial documents before tossing them.

And hey, if you're using your dog’s name and your birth year as your password... it’s time for a change, my friend.

When to Get a Lawyer Involved

Most cases of fraud are resolved through your bank. But sometimes, things get complicated and you might want legal backup.

Consider hiring a lawyer if:
- Your bank refuses to refund the charge.
- Someone opened multiple accounts or loans under your name.
- You suffered major financial loss or emotional distress.
- You want to sue for damages.

Consumer protection lawyers specialize in this kind of stuff, and many offer free consultations. Don't be afraid to explore your options if things are heading south.

Final Thoughts

Handling fraudulent charges is no fun—but it’s not the end of the world, either. The key is to act quickly, follow the proper steps, and protect yourself going forward. Think of it like patching a leaky boat—you plug the hole, bail out the water, and put on a life jacket so you stay afloat the next time a storm hits.

Getting scammed sucks. But taking control of your finances feels powerful. And at the end of the day, that feeling is worth way more than any fraudulent charge could steal from you.