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Finding an unfamiliar purchase or withdrawal on your checking account statement or online activity can be alarming. While it could be a legitimate transaction you simply forgot about, it could also be a sign that your account has been compromised.
Either way, there’s no reason to panic: Banks typically reimburse customers for unauthorized transactions. That means if someone steals money from your bank account, you can generally get it back.
The hitch is that you need to act fairly quickly. The window for resolving disputes for debit cards and bank accounts is generally shorter than it is than resolving disputes for credit cards.
Here’s a closer look at what counts as an unauthorized banking transaction, what to do if someone steals money from your bank account, and how to protect yourself in the future
Key Points
- Contact the bank immediately upon noticing unauthorized transactions to report the issue and minimize liability.
- File a formal dispute, including account details and the date of the unauthorized transaction.
- Change account passwords and PINs to prevent further unauthorized access.
- Review all recent transactions for additional suspicious activity and report it.
- Place a freeze or lock on the account or establish alerts to prevent additional unauthorized use.
What Constitutes an Unauthorized Transaction
An unauthorized transaction occurs when someone makes a payment or transfers money from your bank account without your permission.[1] This could happen to your account for various reasons, including someone stealing your debit card, a hacker or fraudster using your stolen account information, or even a simple error or mistake.
However, it’s important to distinguish between unauthorized transactions and transactions you may simply disagree with. Some examples of charges you may find questionable or irksome but that don’t qualify as unauthorized transactions include:
- You forgot you signed up for a free trial that turned into a paid subscription.
- A family member made a purchase without telling you.
- You don’t recognize a legitimate transaction because the merchant bills under a different name than they do business with.
- You purchased something and were unhappy with the service or product.
These cases, while potentially frustrating, are generally not considered unauthorized by banks. Instead, they may fall under billing disputes or customer service issues.
Steps to Take If You Suspect an Unauthorized Transaction
If you believe a transaction in your banking history truly is unauthorized, you’ll want to act quickly. Federal law provides strong consumer protections, but they often come with strict timelines. Waiting too long can limit your options and your potential for a full refund.[2]
Here are the steps that can help you make a complete recovery:
1. Contact Your Bank or Credit Union Immediately
It’s wise to notify your bank or credit union as soon as you notice a potentially fraudulent transaction. You can do this by calling the customer service number found on the back of your debit card, listed on your statement, or published on the bank’s website or in its app. You’ll likely need to provide your account information, the date and amount of the transaction[3], and why you believe it was unauthorized.
Many financial institutions also allow you to report fraud through their online banking or mobile app platforms. To start your dispute, you typically need to select the transaction from your recent transaction list, then select “Report an issue,” and answer questions about the charge.
2. File a Formal Dispute/Follow-Up in Writing
Once you’ve contacted your bank, you may be asked to submit a written statement to back up your claim and include any supporting documents (such as screenshots or receipts).
Even if your bank doesn’t request you to file a formal dispute, it can be a good idea to follow up your phone call with a written or emailed letter.[4] You’ll want to be sure to include:
- Your account number
- The date and time when you noticed your account was compromised
- When you reported the unauthorized transaction
Once you’ve notified your institution about an unauthorized transaction, it generally has 10 business days to investigate the issue. The countdown begins from the time you give verbal notice of the issue, even if you were required to follow-up with written confirmation.
If the transaction involved a merchant, you may also want to contact the merchant and dispute the purchase. The merchant could potentially refund your money more quickly than the bank can.
Recommended: How to Cancel a Pending Transaction
3. Change Your Account Passwords and PINs
If someone has gained unauthorized access to your bank account, there’s a good chance they may have your login credentials or debit card information. To protect yourself from further bank account fraud:
- Change your account password: To stop hackers, it is important to create complex, unique login credentials for your online banking accounts.
- Enable multi-factor authentication (MFA): If you haven’t already, now is a good time to set up MFA on your account. This second layer of protection can involve being texted a code or providing biometric information, such as facial recognition, for greater security.[5]
- Update your PIN: If the fraud involved an ATM or debit transaction, you’ll want to create a new (and hard to guess) debit card PIN, or personal identification number.
4. Review Recent Transactions Carefully
After identifying one suspicious charge, it’s crucial to scan through recent transactions for other red flags. Be on the lookout for charges from unfamiliar locations and businesses, duplicate transactions, and small transactions you didn’t authorize (fraudsters often start with small “test” charges, or micro-payments, before moving on to larger amounts[6]).
You’ll want to report any additional suspicious activity you find during this review.
5. Consider Placing a Freeze or Lock on Your Account/Card
To prevent further unauthorized use, you may want to place a temporary lock or freeze on your debit card or account.
Many banks offer:
- Instant card locks via mobile app: You may be able to lock your debit or credit card by logging into your banking app. This typically involves tapping the Menu, then “Manage debit/credit card,” selecting the card you wish to lock, and tapping “Lock.” You can also usually lock your card through online banking or over the phone.
- Bank account freezes: With an account is frozen, you can still monitor your account and receive deposits (including your paycheck), but no one — not even you — can take or transfer money out of the account until the freeze is lifted. This means that any automatic payments you have set up through your checking account won’t go through, so you’ll need to pay these bills in a different way until the freeze comes off.
Will Your Bank Refund Unauthorized Transactions?
Yes — in most cases, your bank is required by law to reimburse you for unauthorized electronic transactions, provided you report them within a specific time frame. In the case of debit card loss or theft, however, you may have some liability.
Timeline for Reporting Suspicious Activity
Under federal law, you have protections that help limit what you have to pay if your ATM or debit card is lost or stolen, or you notice any unauthorized charges on your bank statement. Here’s how it breaks down:
- For debit/ATM card loss: If you report a lost/stolen debit card or PIN to your bank or credit union within two days of noticing it, your liability will be limited to no more than $50 in charges. If you report the loss after two business days, however, you could be responsible for up to $500 in unauthorized transactions. If you wait more than 60 days to report the loss, you may be responsible for all the money taken from your ATM/debit card account.
- For unauthorized bank account transactions: If an unauthorized electronic fund transfer (EFT) appears on your statement, but your card or PIN has not been lost or stolen, you will not be liable for the debit if you report it within 60 days after your account statement is sent to you. If you report it after the 60-day window, on the other hand, you could be on the hook for the full transaction amount.
Credit vs Debit Unauthorized Transaction Liability
Credit cards generally offer broader liability protections than debit cards.
Under the Fair Credit Billing Act, your liability for unauthorized credit card transactions is limited to $50 if you report the suspicious charge within 60 days.[7] However, the major credit card issuers generally offer zero liability for unauthorized purchases if you report them within 30 days, and some issuers offer zero liability with no time limit.
Debit cards work differently, since the money you spend is immediately debited from your checking account. As mentioned above, your liability depends on how quickly you report the lost or stolen card. If you report it within two business days, your maximum loss will be $50. If you wait more than two business days but less than 60 days, your max loss will be $500. After 60 days, your liability is unlimited.
Recommended: Debit Card Fraud: How It Works and How To Prevent It
While no one is immune to fraud, you can significantly reduce your risk by following some smart financial habits:
- Avoid isolated ATMs: Criminals will sometimes set up skimming devices (plastic overlays that fit onto the slot and can capture your PIN and other card information) at ATMs that are located in dimly lit, out-the-way places. Try to choose ATMs located inside a bank branch, where there are security cameras. If an ATM looks as if it may have been tampered with, trust your gut, and avoid it.
- Be alert to fake emails and texts: If you receive a text or an email notifying you of a problem with an account, you’ll want to avoid clicking on any links. They may take you to a legitimate-looking site that asks you to enter your private information, which is then sent directly to scammers. The link could also download malware such as viruses, ransomware, and spyware onto your device.[8]
- Beef up your personal security: Using strong, unique passwords for each account (and an unusual PIN for your debit card) is key. But those measures aren’t always enough. It’s also wise to set up MFA authentication and biometrics (fingerprint or facial ID) to further safeguard your accounts.
- Monitor your accounts: Since time can be critical when reporting —- and stopping — unauthorized transactions, it’s important to regularly review your bank statements or online banking transactions. It’s also a good idea to set up mobile banking alerts for large or international transactions, so you are aware of any suspicious transactions right away.
- Use digital wallets whenever possible: Digital wallets, like Apple Pay or Google Pay, have multilayered security features. This typically includes tokenization, which encodes your debit and credit card details, so the numbers are never shared with a merchant. Some wallets also use biometric data to confirm it’s really you making the transaction.
Recommended: Passive Income Ideas
The Takeaway
Unauthorized transactions can be unsettling, but you’re not powerless. You can typically recoup your losses if you act quickly.
If you notice something suspicious, immediately contact your bank, file a dispute, and take steps to secure your information. There are also things you can do to prevent future incidents, like avoiding ATMs that could be tampered with, monitoring your accounts, and using a digital wallet.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
Can I get my money back if someone used my debit card?
Yes, you can usually get your money back if someone used your debit card without permission, especially if you report it quickly, though you may have some liability. Typically, if you report the unauthorized debit card use within two business days, your liability is limited to $50. If you wait more than two business days but less than 60 days, your max loss will be $500. After 60 days, you could be on the hook for the full amount.
Can banks reverse unauthorized transactions?
Yes, banks are generally required to refund unauthorized transactions if you report them in a timely manner. However, it’s important to act quickly. If you report an unauthorized electronic fund transfer (EFT) later than 60 days after receiving the statement that lists the charge, you may be liable for the full amount.
Can my bank find out who used my card?
Yes, banks can sometimes identify who used a card, especially in cases of fraud. Banks often work with law enforcement to gather data, including transaction details, location data (if available), IP addresses (for online transactions), and surveillance footage, when investigating unauthorized transactions. However, it’s not always possible to pinpoint the exact identity of the card user.
How do I get a refund for an unauthorized payment?
To get a refund for an unauthorized payment, you’ll want to contact your bank immediately through their fraud or customer service line. Banks typically require you to report the issue within 60 days of the statement date showing the transaction. They may ask you to fill out a dispute form or provide written confirmation. The bank will then investigate and determine whether to refund the payment based on the findings.
Is there a time limit on when I can report unauthorized transactions?
Yes. Under federal law, you must report any unauthorized bank account transactions within 60 days of the statement date that includes the unauthorized charge to avoid any liability. Delays in reporting could increase your financial responsibility, potentially up to the full amount. So it’s crucial to monitor your account regularly and report any suspicious activity as soon as possible.
Article Sources
- Consumer Financial Protection Bureau. How do I get my money back after I discover an unauthorized transaction or money missing from my bank account?.
- CT.gov. Unauthorized Withdrawal from Your Bank Account.
- Federal Trade Commission. Dispute Letter for ATM/Debit Card Transactions.
- Federal Trade Commission. Lost or Stolen Credit, ATM, and Debit Cards.
- Cybersecurity & Infrastructure Security Agency. Multifactor Authentication.
- Office of the Comptroller of the Currency. Credit Card and Debit Card Fraud.
- FDIC. What You Need to Know About Credit and Debit Card Billing Issues.
- FBI. Spoofing and Phishing .
About the author
Julia Califano
Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.
photo credit: iStock/Yurii Karvatskyi
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