This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

When an unauthorized transaction is reported, a bank typically gathers information, analyzes the incident, and makes a determination about what happened and what the next steps will be.

In today’s era of digital commerce and banking, there are a number of options that can make it easier to pay for goods and services, such as online bill pay, debit cards, and mobile wallets.

Sometimes, however, despite your best efforts to keep your private information secure, you may discover an unauthorized transaction. If this happens, know that banks work hard to investigate and resolve this kind of issue in several ways. Learn more here.

What Are Unauthorized Transactions?

Unauthorized transactions are any bank account transactions that the account holder did not approve of. It could be a payment that was mistakenly charged to your account, but it could also indicate fraudulent activity. For instance, a criminal might write a fraudulent check from your checking account or use your debit card to make an unauthorized withdrawal from your bank account without your knowing it.

There are a number of different methods fraudsters may use to try to get access to your checking account, including:

•   Stealing and “washing” a check (meaning erasing the original information and adding fraudulent details)

•   Stealing your debit card (or finding a lost debit card)

•   Stealing your information with card skimmers and hidden cameras

•   Conducting a scam in which they try to convince you to share your confidential account info

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Initial Detection of Unauthorized Transactions

There are two main ways to detect unauthorized transactions:

1.    You as the account holder may notice a transaction in your checking account that you did not authorize. If you have bank alerts set up for your account, you may also get a push notification about a transaction you did not make.

2.    The bank itself may detect the unauthorized transaction. Banks have advanced fraud detection methods, including pattern recognition, machine learning, artificial intelligence, behavioral analysis, geolocation data, and more that can tip them off when a transaction appears to be fraudulent.

If you as the customer notice the bank account fraud, it’s crucial that you contact your bank’s fraud department immediately (the number is typically on the back of your debit card). A representative can walk you through next steps, such as:

•   Canceling or freezing your debit card

•   Ordering a new card

•   Updating your bank account password (and ideally your email password as well)

•   Starting a formal fraud investigation with the bank

If the bank’s fraud detection software notices a suspicious transaction, the bank will generally contact you via text, email, or phone call to verify the transaction. If you don’t recognize the transaction, the bank will begin its fraud investigation.

Recommended: How to Report Identity Theft

Bank Investigation Process

When consumers report potential fraud, banks generally have 10 business days to investigate the transaction (20 business days if the account was opened in the last 30 days). Once the bank has determined there was an error, it has only a single day afterward in which to correct it.

If the bank can’t complete its investigation within 10 or 20 business days, it must issue the consumer a credit to the account for the disputed amount, minus $50, while the investigation continues. Usually, the bank or credit union has up to 45 days to finish their investigation and share their findings. In some cases (such as if the incident occurred in a foreign country), it may take up to 90 days to achieve a final resolution.

Whether you as the consumer bring the unauthorized transaction to the bank’s attention or the bank’s fraud detection system finds the issue, the bank or credit union will typically investigate as follows:

1.    Gather transaction details. The bank’s fraud team will collect as much information about the transaction as it can, including the time and date, the merchant, and the amount. They’ll also analyze other transaction patterns and consumer behavior.

2.    Make a determination. Based on these details, the bank should be able to determine if the transaction was unauthorized or if there are fraudulent charges — and if the merchant has any blame in the scenario.

3.    Take action. The bank may or may not reimburse the customer, depending on their findings. Further, the bank may pursue charges against the criminal, if applicable and possible. The bank will also file a suspicious activity report (SAR) if that is deemed appropriate and hand the case over to the authorities.

Recommended: What Can Someone Do With Your Bank Account and Routing Number?

Fraud Prevention Measures

Even consumers who take the strictest safety measures can be victims of bank fraud. Nevertheless, it’s worth doing everything in your power to avoid unauthorized transactions, including:

•   Using unique, complex passwords. Your email, financial accounts, and any other online accounts should have unique and complex passwords. These should be updated often and never reused or shared. You might want to consider using a password manager service to assist with this.

•   Turning on alerts. Bank alerts can be helpful in spotting fraud in real time. Turn on all relevant alerts available in your bank’s mobile app or on its website. You can also monitor your transactions in app or on the site and balance your checking account regularly to help you identify unauthorized charges.

•   Using all the security measures available to you. Multifactor authentication (MFA) and biometric screening (such as facial recognition) add extra layers of protection on top of passwords.

•   Not sharing your PIN. Think of a unique PIN for your debit card, and don’t share it with anyone.

•   Protecting your wallet. Always be smart about where you stash your wallet. Also consider using an RFID wallet. This can block contactless scanning of your cards’ chips, which hold your confidential banking details. Only carry the cards you need; keep the rest at home in a safe.

•   Being careful at ATMs and points of sale. Make sure no one is watching you punch in your PIN when making a transaction (they could steal your card and then use it). Always check ATMs and gas pumps for signs of card skimmers, or devices that fit over the slot where you dip your card and steal your credentials.

•   Recognizing phishing scams. Fraudsters are always finding new ways to get account information. Educate yourself about the latest phishing and bank scams, and always be wary when someone asks for your account information. Just because someone calls or texts saying they are “from your bank” doesn’t make it true.

The Takeaway

Just as it’s important to take basic security measures to prevent your financial information from getting into the wrong hands, it’s also crucial to act quickly if you detect an unauthorized charge on your debit card or a fraudulent transaction in your account. Banks must take reasonable steps to investigate unauthorized transactions and notify you of the results in a timely manner.

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FAQ

What triggers a bank investigation of unauthorized transactions?

If you don’t recognize a charge in your checking account, you should report the unauthorized transaction to your bank right away to trigger an investigation. To do so, contact your bank’s fraud department. Banks also monitor your account for fraudulent charges and may contact you if their security measures detect an unauthorized transaction.

How long does a bank investigation typically take?

In most scenarios, banks have 10 business days to investigate a fraudulent transaction after you report it. If they can’t finish it in that time, they may have to credit your account while they continue the investigation. In total, banks and credit unions have 45 business days to resolve an issue, except for some specific exceptions (like if the fraud occurred in another country).

What actions can customers take to help prevent unauthorized transactions?

To help prevent unauthorized transactions from hitting your checking account, you can use a strong password and opt in to multifactor authentication or biometric screening; turn on fraud alerts; be cautious when using your debit card in public; and freeze or cancel your card if you lose it, among other habits.

Photo credit: iStock/NoSystem images

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This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Judging from the latest statistics, the most lucrative work-from-home job in America may be Con Artist. Fraudsters are utilizing texts, social media, fake websites, apps, emails, and old-fashioned voice calls to separate Americans from their money — billions every year. They play on our greed, or charity, or desperation. And they take all forms of payment.

The best way to fight back against fraud is to be aware of current schemes so you don’t fall victim in the first place. Below we share the top financial shakedowns, with enough details to help you recognize red flags, and statistics that will blow your mind. Read on to learn how to avoid getting fleeced (and how to report it if you are).

Identity Theft and Credit Card Fraud Trends

If you’ve been the victim of identity theft or credit card fraud, you’re hardly alone.

According to the Federal Trade Commission (FTC), there were 552,000 reported cases of identity theft through the first half of 2024. At this rate, the year is on track to surpass the number of reported cases in 2023.

Meanwhile, there were 214,607 reported cases of credit card fraud by mid-year, up 6% from the previous six months. The impact of both crimes can be substantial. In 2023 alone, some 2.6 million consumers collectively lost more than $10 billion to fraud — a 14% increase from 2022.

There are several potential reasons for the surge. More people are turning to digital tools to handle everyday tasks, like shopping and banking. At the same time, scam email messages — no, that’s not the U.S. Post Office — have also spiked in recent years. And finally, the rise of crypto seems to play a role: The FTC has warned consumers that no reputable utility or creditor will demand payment only in crypto.

If you’re a victim of credit card fraud, it’s important to report it ASAP. You can get your credit report and find out your credit score for free at AnnualCreditReport.com®.

You can also enlist the help of a money tracker app, which allows you to manage all of your finances from one convenient dashboard.

Recommended: What Credit Score Is Needed to Buy a Car?

33 Identity Theft and Credit Card Fraud Stats

Below we do a deep dive into the most common types of fraud: imposters, online shopping scams, fake prizes and sweepstakes, false job opportunities, fictional charities, investment swindles, and more. All numbers quoted below are from 2023 FTC data.

1 Imposters: Reports Filed

The total reports filed in this one category came to 853,935, with 21% of filers admitting losses. An imposter is a person who pretends to be someone else to steal your personal information or money. They might call, text, or email you and may pose as someone you know. (“I’m on vacation in London and lost my wallet! Can you send me some cash?”).

2 Imposters: Losses

The median loss suffered by victims was $800. The total dollar amount of imposter scam losses was $2.668 billion.

3 Imposters: Scenarios

The most common way imposters approached targets was via email, and victims often paid via credit card.

4 Imposters: Top States Affected

Oregon led with 2,640.7 reports per million people. Washington and Colorado followed close behind.

Recommended: What Is a Tri-Merge Credit Report?

5 Online Shopping: Reports Filed

Total reports filed came to 369,469, with 53% claiming losses. In an online shopping scam, someone pretends to have a legitimate business by creating a phony website or posting fake ads on a real retailer’s site.

(Another form of this fraud is when scammers create and post fake negative reviews of small businesses and then tell owners that they’ll remove the reviews in exchange for digital gift cards.)

6 Online Shopping: Losses

The median loss suffered by victims was $125. The total dollar amount of online shopping scam losses totaled $392 million.

7 Online Shopping: Scenarios

Victims are most often taken in by websites or apps — not surprising, given the nature of this fraud — and are asked to pay via gift card.

8 Online Shopping: Top States Affected

Delaware led with 1,183.4 reports. New Hampshire and Colorado placed second and third.

9 Prizes & Sweepstakes: Reports Filed

Total reports filed came to 157,520, with 13% reporting losses. “Great news!,” a voice over the phone gushes. “You’ve won money or valuable prizes!” All the winner needs to do is provide their bank account information or pay a processing fee.

10 Prizes & Sweepstakes: Losses

The median loss suffered by victims was $878. Total losses equaled $338 million.

11 Prizes & Sweepstakes: Scenarios

Phone calls, texts, and emails are the most common contact method. Gift cards were of the top payment types.

12 Prizes & Sweepstakes: Top States Affected

West Virginia topped the list with 781.2 reports. Delaware and Alabama placed and showed.

13 Internet Services: Reports Filed

Total reports filed equaled 125,118, with 7% admitting losses. This category includes the use of fake messages or copycat sites — ostensibly from someone’s internet service provider — as part of a phishing or spoofing scam used to commit identity theft. It also includes theft of personal information: debit card PINs, credit card and bank account numbers, and passwords.

14 Internet Services: Losses

The median loss suffered was $250. Total losses came to $36 million.

15 Internet Services: Scenarios

Typically, individuals are contacted via social media and send money via payment app.

16 Internet Services: Top States Affected

Delaware was first in line with 418.6 reports per million people. Nevada and Florida came close on its heels.

17 Job Opportunities: Reports Filed

Total reports filed were 110,364, with 32% reporting a loss. Scammers post genuine-looking want ads and business opportunities in print and online. The catch? There is no job. They just want your personal information and your money. As just one example, a “work-from-home career” starts after the target pays for training, certifications, and/or starter kits.

Recommended: Should I Sell My House Now or Wait?

18 Job Opportunities: Losses

Consumers experienced a median loss of $2,137. Total losses reached $491 million.

19 Job Opportunities: Scenarios

People are most often connected by text and pay the scammers via cryptocurrency.

20 Job Opportunities: Top States Affected

Nevada was again the top contender, with 408.3 reports per million people. Arizona and Georgia achieved second and third place.

21 Advance Payments: Reports Filed

Total reports came to 29,878, with 35% of them suffering a financial loss. Advance payments, as the name implies, refer to a consumer pre-paying for a service. Credit service businesses purport to sell information that will allow the consumer to create a new credit file — perhaps after an identity theft occurred.

22 Advance Payments: Losses

The median loss of each victim was $638. The total amount lost was $75 million.

23 Advance Payments: Scenarios

Fraudsters typically communicate with potential victims via websites and apps for this kind of scam, and request wire transfers to collect the money.

24 Advance Payments: Top States Affected

Mississippi is number one this time, with 152.3 reports per million people. Georgia and Florida follow as numbers two and three.

25 Fake Charities: Reports Files

Total reports came to 9,809, with 27% reporting a monetary loss. Scammers pretend to be from a real or fake charity and ask you to make a donation right then for, say, a natural disaster that just occurred.

26 Fake Charities: Losses

The median loss was $392. The total amount lost was $22.5 million. Asking people to support a heartwarming cause has, unfortunately, been quite successful.

27 Fake Charities: Scenarios

Messages go out via social media, and have the potential to go viral. Scammers most often collect their money through a payment app.

28 Fake Charities: Top States Affected

Alaska led the way with 38.0 reports per million people. Georgia and Nebraska came in second and third place.

29 Investments: Reports Filed

Total reports came to 107,699, with 75% claiming a financial loss. With investment fraud, a scammer tries to get you to invest: in stocks, bonds, real estate, whatever. They may provide false information about a real investment or make something up entirely.

30 Investments: Losses

The median loss was $7,768. Total losses equaled $4.642 billion.

31 Investments: Scenarios

These so-called investment opportunities are described on social media platforms, with cryptocurrency being the top payment method.

32 Investments: Top States Affected

Nevada (again!) leads the way, with 289.9 reports per million people. Florida and Arizona trail behind in terms of percentage of population, but are way ahead in absolute numbers: Washingtonians filed 1,074 reports; Californians, 5,349 reports.

33 Bonus Stat: Tax Prep

A missing refund is one sign that someone else may have filed a fake tax return in your name. Here’s more information about what to do when you don’t receive a tax refund.

The FTC notes that 5,949 reports about tax preparation fraud were filed in 2023, with 10% of people reporting a monetary loss. The total loss was $1.9 million with a median loss of $500.

How to Avoid Credit Card Fraud

As these numbers show, there are plenty of scammers out there. Here are some ways to protect yourself against money scammers:

•   Avoid using debit cards, which are directly connected to your bank account. Credit cards and payment apps tend to be safer. Check your banking and credit card statements regularly, watching for errors and suspicious charges.

•   If your bank offers free transaction alerts, sign up now. For example, you can get an alert whenever a large payment (you choose the number) hits your account. Find out more about different types of bank fraud.

•   If you get a call from a company asking for payment data or other personal information, hang up. If it’s a company you normally deal with, call them back directly to see if the call was genuine.

•   Use password protection on your smartphone and computer devices. Keep your browsers up-to-date, and use reputable anti-virus software downloaded from the app store (not an ad, email or website). Avoid using public WiFi.

•   Shop at reputable retailers only, including but not limited to the ones you use online. If you have questions about a store, check them out on the Better Business Bureau website.

•   When pumping gas or using an ATM, watch out for skimmers: devices that capture your account information for fraudulent purposes. If anything looks odd, let the establishment know.

•   Be cautious about clicking on links from unknown sources, checking to make sure that an email or text message really came from the place it claims and is a reputable organization.

•   Monitor your credit report and watch for inaccuracies. What qualifies as credit monitoring varies, so look for services that send alerts whenever something new hits your report. You may also be able to sign up for free credit monitoring.

How to Report Credit Card Fraud

The first step is to file a dispute with your credit card company. Then you can contact your police station or sheriff’s office. You can also report the fraud to your state’s attorney general (get their contact info from https://www.naag.org/find-my-ag/) You can also submit an online claim with the FTC at https://reportfraud.ftc.gov/#/

The Takeaway

Scammers are reaching out via text, social media, fake websites, apps, emails, and old-fashioned voice calls to separate you from your money. Their stories play on your greed, or charity, or desperation. And they take all forms of payment — but they especially like gift cards and crypto. By learning to recognize the top schemes, you can help protect yourself from getting swindled. More pro tips: Monitor your transactions, avoid using debit cards for purchases, and don’t ever give out your personal or financial info unless you’re 100% sure of who you’re dealing with.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

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FAQ

What are some common credit card scams?

Scammers can be pretty creative. Phishing is when a con artist tries to get you to share personal info or credit card information on the phone, by email, or text. Fake online websites can be built to steal credit card info. Skimmers can be set up on ATMs and credit card readers. And people with ill intent can monitor public WiFi for credit card info. And these are just some of the types of financial fraud out there.

How do credit card scams happen?

Sometimes, your physical credit card can be stolen. More often, someone gets your credit card data without having the actual card. Identity thieves can also steal personal information, set up credit cards in your name, and start spending.

How can you spot credit card fraud?

As you monitor bank statements, credit card statements, and your credit report, you may spot information that just isn’t right. Although this isn’t always because of credit card fraud, that’s a common cause. Proactively investigate when something looks suspicious. You can also set up alerts with your bank to flag certain kinds of transactions.

Photo credit: iStock/SaskiaAcht

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This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

It’s never a good feeling to look at your credit card statement and wonder, “What is this charge on my credit card?” When it comes to fraudulent credit card charges, your bank has often got your back. They have methods for spotting activity that isn’t normal, and they’ll usually alert you when a charge seems suspicious.

That said, your bank might not catch everything, and there may be a charge that’s valid but the amount is incorrect. So it’s important that you, too, keep an eye on your credit card statement to catch these errors and report anything that’s amiss immediately.

Here’s what to watch out for and tips for handling a dispute.

What Are Fraudulent Credit Card Charges?

Credit card fraud can happen if someone steals your card or the information on your card, or hacks into your account. Someone could do so by stealing your physical card, skimming your card information at a credit card terminal, through phishing scams via text or email, or by stealing your mail. Fraudsters then use the information they’ve stolen to make unauthorized purchases on your credit card.

Most cards offer zero liability on fraudulent charges, meaning you won’t be responsible for covering charges you didn’t authorize. This is an important feature of how credit cards work. However, it’s important that you catch fraudulent charges early so you can report them quickly and minimize your liability.

Recommended: Tips for Using a Credit Card Responsibly

Detecting Unauthorized Credit Card Charges Early

The key to spotting unauthorized charges on your credit card is remaining vigilant and always checking your credit card statement each month. When you receive your statement, follow these steps:

•   Review statements immediately. Avoid letting a few months of credit card statements accumulate before checking them. Whether you look them over online or via hard copy, do so ASAP so you can catch errors and head off fraud as quickly as possible. Going through your statements regularly will also offer a clearer understanding of how credit card payments work.

•   Check every purchase. Fraudsters know that small unauthorized credit card charges are less likely to get flagged. Go down the list of purchases you’ve made on your card over the last month and make sure you recognize the merchant and can match the sale with an item or service you bought.

•   Keep receipts. Hang on to receipts from credit card purchases so you can match them up to the items in your statement. This can also help if you’re unsure of how to identify a credit card transaction.

Fraudulent Credit Card Charges vs Billing Errors

Fraudulent charges are a result of theft. However, sometimes you may be charged for something that was due to a billing error. For example, perhaps you were charged twice for an item, or you were charged for goods or services that you never received.

Other billing errors could include:

•   Unauthorized charges, for which federal law limits your liability to $50

•   Charges that list the wrong date or amount

•   Errors in math

•   Charges for goods or services that you didn’t accept or weren’t delivered as agreed

•   Failure to post payments or credits, such as after you’ve returned an item.

You can correct these errors using procedures laid out by the Fair Credit Billing Act (FCBA). If a charge is found to be made in error, your credit card company will carry out a credit card chargeback, reversing the charges.

Reporting Unauthorized Credit Card Charges

Procedures for reporting fraud and billing errors are slightly different.

If you suspect fraud, you’ll take the following steps:

•   Contact your card issuer immediately. Tell them you suspect that you’ve been a victim of fraud. Your issuer can then investigate the charge.

•   Ask for your accounts to be suspended or closed, and ask to be issued a new card. Change passwords and personal identification numbers (PINs) on your accounts.

•   File an identity theft report with the Federal Trade Commission (FTC). You can do so at Identitytheft.gov .

•   Contact the three credit reporting bureaus, Equifax^®, Experian^®, and TransUnion^®. Confirm your identity with them and check your credit reports for any other fraudulent activities. Consider having a fraud alert connected to your accounts.

If you’re disputing a billing error, first call your credit card company and alert them to the error. The credit card company will investigate. If they find there was an error, your account will be corrected, and you will not pay credit card purchase interest charges on the amount for which you were billed.

In addition, send your credit card company written notification of an error. Use FBCA procedures to dispute the credit card charges, including the following steps:

•   Contact the creditor at the address they provide for billing inquiries. This address may be different from the one to which you send payments. Include your name, address, and account number, as well as a description of the billing error you’ve spotted. You may be able to proceed online or by phone as well as through the mail. The FTC provides a sample letter that you can use as part of the process.

•   Include copies of receipts and other supporting documents.

•   Be sure to mail your letter within 60 days of the first bill you received that contained the error.

•   Send the letter by certified mail and ask for a receipt so you can be sure your creditor received it.

•   Keep a copy of the dispute letter.

How to Read Your Credit Card Statement

It’s important to get familiar with how to read your credit card statement. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) requires that each of your credit card statements includes certain pieces of information.

•   First, there should be a section that includes your account information. This is where you’ll find your name, account number, and the date of the billing cycle.

•   Next, the account summary is an overview of transaction information on your card. This section will include the payment due date, any payments or credits that have been applied to the account, any fees that have been charged to you, and the total amount of your account balance.

•   Following this summary is a detailed account of the purchases you’ve made over the billing period. Each line item will include the vendor name, the date the purchase was made, the category (such as “groceries”), and the amount that was charged to your card. Go through this section carefully as you look for fraudulent charges or charges in error. This is how to find who charged your credit card.

•   Your statement will include other sections that detail payment information, interest or credit card finance charges, rewards, and account fine print.

Credit Card Security and Fraud Protection

When you apply for a credit card, carefully look at the security measures the card issuer has in place. Credit cards, such as the credit card offered by SoFi, can have a variety of measures to keep your information safe and protected from fraud.

Fraud protection limits your responsibility and liability for fraudulent charges. Many banks offer $0 liability. The FCBA limits liability to $50 for card-present fraudulent charges, and $0 if the card is not present, such as for online charges made with stolen credit card information.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

Fraudulent charges or billing errors can be an unfortunate part of having a credit card. Your bank may catch them, but it’s also important to be proactive and keep an eye out for fraud and errors on your credit card statement. Bringing them to the attention of your credit card company will help you get the issue sorted faster and head off potential future fraud.

Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do I file a fraudulent charge claim with my credit card company?

If you spot a fraudulent charge on your credit card statement, call your card company immediately and ask them to investigate. They can guide you through the process of disputing the charge.

How do I find out where a charge came from?

You can see where a charge was made in the detailed purchase information provided on your credit card statement.

How do I look up a charge from my credit card statement?

If you’re unsure about a charge on your credit card statement, call your credit card company, which may be able to do a credit card charge lookup by the merchant.

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