What Happens When Your Credit Card is Used Illegally and Fraudulently?

We knew it had to happen sometime in our lifetime, but my husband and I were still shocked to open our credit card statement last month and find thousands of dollars charged on it. Even stranger, it was charged to the secondary card issued to me. I buy gas once or twice a month on the card, in order to take advantage of a discount, and rarely anything else. Here’s what happened to us when we reported the illegal use of our card.

Review your Credit Card Statement for Unauthorized Transactions

We rarely have more than a few hundred dollars of gasoline charges on our monthly credit card bill. (We get a discount on gas by using the card.) So for us, the fraudulent transactions were easy to spot. There was almost $4000 billed to our card in one month! All of the transactions were reported as PayPal sales.

Others who use their credit cards frequently may need to be much more careful. While chatting with co-workers about our bad luck, my husband heard about another subtler scheme. In this other scheme, the fraudulent charge is apparently reversed, but the reversal is $10-30 less than the original charge. For someone who makes a lot of purchases and returns, especially partial returns, this can look like a regular transaction. Check carefully!

Report Any Errors or Frauds Immediately to your Credit Card Issuer

Even though it was 10 p.m. at night when we opened the bill, we immediately called the credit card company to report the thefts. We cancelled that card that night to stop any further transactions from being illegally billed.

The number to call should be listed on your bill. You can also check the internet for the phone numbers for the big credit card companies. Use caution, however, that you are on a legitimate website and that your call is not going to be answered by some criminal trying to get your card number from you! (You could always call the toll-free number for the bank associated with card and ask them for the correct phone number.)

Will You Have to Pay for the Illegal Purchases?

In our case the card had never left our possession. We had never written down or shared the PIN with anyone. (It was a chip-enabled card.) We did not have a PayPal account with this or any other card. We disputed the illegal charges immediately upon receipt of our bill, well in advance of the payment due date. We have never had to dispute any illegal purchases in the past.

In our case, we were told that the charges would be cancelled. We were advised to pay the balance of the bill (the real charges) before the payment due date, as usual.
We did pay the portion of the bill that we owed the next day.

What Happened Next?

The Compromised Credit Card Will be Replaced

Because my card was cancelled, I had to arrange to receive a new card. The credit card issuer offered to have it delivered to the nearest bank branch affiliated with their brand. They also would deliver it to our home address if we wished. We arranged to have it delivered to the bank for personal pickup.

The new card arrived at the bank in two business days and the bank phoned to advise me to come and pick it up. After showing my photo id, I received my new card. I had to select a new PIN for this new card.

A Letter Outlining the Fraudulent Charges Will be Sent for Signature

Next, the credit card issuer wrote a letter of the charges we claimed were fraudulent. They asked us to review it, sign it and return it to them quickly.

It took almost two weeks (10 business days) to receive the letter. However, the information it contained was correct when it arrived.

I phoned the personal contact provided to discuss the letter to check there were no new illegal charges that should be added to the list. The person I spoke with was very helpful and courteous.

We returned the letter in the postage-pre-paid envelope the next day, as requested.

And Now We Wait

We were advised that on our next bill we should see the illegal charges reversed. Frankly I’ll feel better when I see that statement. While we are fortunately in a position where the charges would not have crippled us financially, it would have been very hard to accept losing such a large amount of money through no fault of our own.

Will the Credit Card Issuer Catch the Criminal?

We hope that the fact I rarely used this card will help the credit card fraud team to catch the criminal responsible. If they have other customers with the same problem a pattern may be quickly identified as there were only a half-dozen places I made a purchase in the past 6 months. If one of those places is also on the list of another victim, they may find the link they need.

What If I Lost my Card without Reporting It, Shared my PIN or Wrote Down my PIN

The good news in our case is that the charges will be reversed. Our complaints, however, may not have been handled the same way if we had lost our card without reporting it, shared our PIN or written down our PIN. Any one of those actions could result in you being held partially or totally responsible for the theft or fraudulent transactions. Be careful!

Conclusions about Our Credit Card Theft

In conclusion, we are pleased with how our credit card issuer handled this problem. We are even more aware now of the need to practice credit card security. We have always had a low-limit credit card used only for online purchases. Ironically, that was not the one that was compromised, but it still provides us with somewhat more security. I hope that this is our last encounter with this type of crime but at least we did not lose any money.

Related Reading

• Credit Card Security: Get and Use a Low-Limit Credit Card for Internet Shopping

• What Do You Have to Do When Your Credit Card is Used Fraudulently? (Credit Card Misery: Part Two)

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