The Fair Credit Billing Act limits losses on your lost or stolen credit cards to $50 in charges. In practice, your bank may often choose to reimburse you for the entire amount lost.
To be entitled to a refund from your bank for credit card fraud required some action from you. You need to report the problem as quickly as possible. Most banks allow 60 days for you to report credit card fraud.
You are given a form to fill out and the bank begins a process of investigation into the matter. The form is quite details and asks what the incorrect charges were, when they were made and the amounts of the fraudulent charges you are claiming. You may be asked to complete an affidavit to the truthfulness of your claims.
Investigation by the bank is not instantaneous and can take weeks to complete. If the charges are judged to be fraud the bank will issue a refund to you.
On credit cards, some lenders will issue the refund immediately as a credit to your account and refer to it as a “temporary credit”.
This is done when the lender assumes the fraud occurred and the credit will be taken back from your account if your claim is not found to have merit.
Avoiding Credit Card Fraud
If your credit card is stolen or lost it should be reported immediately to the lender. This allows the account to be frozen and a new credit card issued and will prevent anyone from using that lost or stolen card to commit fraud against you.
Be cautious of giving out your credit card number. If you order items online, be certain you are on a secured website before entering personal information.
Check the address bar of your browser and you will see https:// where the “s” indicates that web page is secure. In most browsers a small padlock icon will also be displayed on the lower toolbar when you are accessing a secure site.
One of the most common mistakes made by consumers using credit cards is to write the PIN number of the account on the back of the card. It is convenient as you don’t have to remember numbers and as long as your card is in your possession it isn’t a problem.
If your purse is stolen or someone visitor your home lifts your credit cards, that PIN number allows the person to remove funds from your account immediately.
Why Banks May Not Reimburse you for Fraudulent Charges
The investigation by your bank includes look at how you handled your credit card. Though a banks might try to deny repayment if you wrote your PIN on the back of your card, they will usually end up refunding the money to you if you refuse to accept “No” as an answer.
If you ask your lender whether you are entitled to a refund in case of credit card fraud, it is unlikely you will get a straight yes or no answer.
The answer will be full of “maybe” and “if” and “it depends”. What the bank is doing is keeping options open until there is an investigation so don’t be discouraged by that response.
One problem that can damage your chance of a refund is if the fraud was committed by a friend or family member who had access to your credit card.
If you left your card in a drawer and a family member used it you might obtain your refund but might also have your credit card canceled by the lender.
It is not usual practice but it is a problem the lender cannot control and a risk a bank may not want to take in the future.
Are you entitled to a refund from your bank for credit card fraud? Yes, in most cases you will be reimbursed in full. At the worst, you will lose only the $50 allowed by law.