Reporting Credit Card Fraud: A Step-By-Step Guide

Quick answer

• Act immediately upon discovering unauthorized charges.
• Contact your credit card issuer directly.
• Review your credit reports for additional suspicious activity.
• File a police report if necessary.
• Understand your rights under federal law.
• Keep detailed records of all communications and actions taken.

What to check first (before you act)

Credit report accuracy

Before taking any action, it’s crucial to ensure your credit report accurately reflects your financial activity. Fraudulent charges can appear on your report, and correcting them is a key part of the process. You are entitled to a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) annually. Review these reports carefully for any accounts or transactions you don’t recognize.

Utilization and balances

High credit utilization, even on legitimate accounts, can negatively impact your credit score. If fraud has occurred, it could artificially inflate your balances. Understanding your current utilization and the impact of any fraudulent charges is important for assessing the damage and for future credit rebuilding.

Payment history

Your payment history is a significant factor in your credit score. If fraudulent charges lead to missed or late payments (because you disputed the charge or it went unnoticed), this can severely damage your credit. Confirm that your payment history remains accurate and dispute any inaccuracies stemming from the fraud.

Recent inquiries

Credit bureaus track inquiries made on your credit report. If fraudulent activity involved someone applying for new credit in your name, you might see an increase in recent inquiries. These can temporarily lower your score. Identifying and disputing these unauthorized inquiries is part of the fraud resolution process.

Time horizon

The timeline for resolving credit card fraud can vary. While immediate action is critical, understanding that it may take time for investigations to conclude and for your credit report to be fully updated is important. Be patient but persistent throughout the process.

Step-by-step (credit improvement workflow)

1. Review your credit card statement immediately.

• What to do: Scrutinize every transaction on your most recent credit card statement for any charges you don’t recognize.
• What “good” looks like: You find no unauthorized charges, or you identify them quickly.
• Common mistake: Waiting until the end of the billing cycle to review your statement.
• How to avoid it: Make it a habit to check your online account or statement at least weekly.

2. Contact your credit card issuer directly.

• What to do: Call the customer service number on the back of your credit card or your issuer’s official website to report the suspected fraud.
• What “good” looks like: You speak with a fraud specialist, and they initiate a fraud investigation.
• Common mistake: Using a generic online search for a customer service number, which could lead to a scam.
• How to avoid it: Always use the contact information printed on your physical card or from your verified online account portal.

3. Dispute the fraudulent charges.

• What to do: Clearly state which charges are fraudulent and why. Your issuer will guide you through their dispute process.
• What “good” looks like: The issuer acknowledges your dispute and provides a timeline for investigation.
• Common mistake: Not being specific about which charges are fraudulent or providing vague reasons.
• How to avoid it: Keep a list of the exact dates, amounts, and merchant names of the suspicious charges.

4. Request a new credit card.

• What to do: Your issuer will likely cancel your compromised card and issue you a new one with a different account number.
• What “good” looks like: You receive confirmation of the new card issuance and its expected arrival date.
• Common mistake: Continuing to use the compromised card number while the fraud is being investigated.
• How to avoid it: Ensure the old card is deactivated and update any automatic payments linked to the old card number once the new one arrives.

5. Monitor your credit reports.

• What to do: Obtain free credit reports from Equifax, Experian, and TransUnion. Review them for any other suspicious activity, such as new accounts opened in your name.
• What “good” looks like: Your reports show no additional unauthorized accounts or inquiries.
• Common mistake: Only checking one credit bureau’s report.
• How to avoid it: Request all three reports annually at AnnualCreditReport.com.

6. Dispute any fraudulent activity on your credit reports.

• What to do: If you find unauthorized accounts or inquiries on your credit reports, contact the respective credit bureaus and the creditor that opened the fraudulent account to dispute them.
• What “good” looks like: The bureaus initiate investigations and remove the fraudulent items.
• Common mistake: Assuming the credit card issuer will handle credit report disputes automatically.
• How to avoid it: Understand that credit card disputes and credit report disputes are separate processes.

7. File a police report (if applicable).

• What to do: For significant fraud or identity theft, consider filing a report with your local police department. This can be a valuable document for your own records and for some investigations.
• What “good” looks like: You receive a police report number and documentation.
• Common mistake: Believing a police report is always required for credit card fraud.
• How to avoid it: Consult with your credit card issuer or a fraud expert to determine if a police report is necessary for your specific situation.

8. Consider filing a complaint with the CFPB.

• What to do: If you encounter difficulties resolving the issue with your credit card company, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).
• What “good” looks like: The CFPB facilitates communication and resolution between you and the company.
• Common mistake: Not using the CFPB as a resource when other avenues fail.
• How to avoid it: Visit the CFPB website to understand their complaint process.

9. Secure your online accounts.

• What to do: Change passwords for your credit card accounts, banking, and any other sensitive online services. Enable two-factor authentication (2FA) wherever possible.
• What “good” looks like: Your online accounts are secured with strong, unique passwords and 2FA.
• Common mistake: Using weak, reused passwords across multiple accounts.
• How to avoid it: Use a password manager to generate and store strong, unique passwords for each online service.

10. Keep meticulous records.

• What to do: Document every phone call (date, time, representative’s name, summary), email, letter, and document related to the fraud.
• What “good” looks like: You have a complete and organized file of all communications and evidence.
• Common mistake: Not keeping records, making it difficult to track progress or provide evidence if disputes arise.
• How to avoid it: Create a dedicated folder (physical or digital) for all fraud-related documentation.

What affects your score (plain language)

• Payment history: Paying bills on time is the most critical factor. Late payments can significantly hurt your score.
• Credit utilization: This is the amount of credit you’re using compared to your total available credit. Keeping balances low, ideally below 30%, is beneficial.
• Length of credit history: The longer you’ve had credit accounts open and in good standing, the better.
• Credit mix: Having a variety of credit types (e.g., credit cards, installment loans) can be positive, but it’s not a major factor.
• New credit: Opening many new accounts in a short period can signal higher risk and temporarily lower your score.
• Public records: Bankruptcies or tax liens can severely damage your score.
• Inquiries: Each time you apply for new credit, it can result in a hard inquiry, which may slightly lower your score.
• Fraudulent activity: Unauthorized charges can lead to missed payments or inflated balances, both of which negatively impact your score.

What NOT to do while improving credit: Avoid closing old, unused credit cards, as this can reduce your overall available credit and shorten your credit history. Also, resist the urge to apply for multiple new credit accounts simultaneously, as this can signal financial distress.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Delaying reporting of fraud	Unauthorized charges accumulate, potentially leading to missed payments and higher debt.	Report any suspicious activity to your credit card issuer immediately.
Not disputing charges promptly	Liability for fraudulent charges may increase; inaccurate reporting on your credit.	Follow your issuer’s dispute process within the specified timeframe.
Failing to update automatic payments	Missed payments on legitimate bills, leading to late fees and credit score damage.	Once a new card is issued, update all recurring payments linked to the old card number.
Ignoring credit report errors	Fraudulent accounts remain on your report, negatively impacting your score.	Regularly review credit reports and dispute any inaccuracies with the credit bureaus and the reporting creditor.
Not changing compromised passwords	Risk of further unauthorized access to financial accounts and personal information.	Change passwords for all affected online accounts and enable two-factor authentication.
Assuming the card issuer handles everything	Credit report disputes are separate from card issuer investigations.	Proactively dispute fraudulent accounts or inquiries directly with credit bureaus if they appear on your reports.
Not keeping records	Difficulty in tracking progress, providing evidence, or resolving disputes.	Maintain a detailed log of all communications, dates, and documents related to the fraud.
Using a compromised card number	Further unauthorized transactions and complications in the fraud investigation.	Ensure the compromised card is deactivated and do not use it for any transactions.
Not reviewing statements regularly	Fraudulent activity can go unnoticed for extended periods, worsening the impact.	Make it a habit to check your credit card statements and online accounts frequently for any discrepancies.
Not securing other online accounts	Potential for cascading identity theft if other accounts are also compromised.	Implement strong, unique passwords and two-factor authentication across all sensitive online accounts.

Decision rules (simple if/then)

• If you see a charge you don’t recognize on your credit card statement, then contact your credit card issuer immediately because prompt reporting limits your liability.
• If your credit card issuer advises you to file a police report, then do so because it can be important documentation for identity theft cases.
• If you discover fraudulent accounts on your credit reports, then dispute them with the credit bureaus and the reporting creditor because they can negatively impact your score.
• If your credit card number was compromised, then request a new card with a new account number because this prevents further unauthorized transactions.
• If you are unsure about the legitimacy of a charge, then err on the side of caution and contact your credit card issuer because it’s better to be safe than sorry.
• If you are experiencing significant difficulties resolving credit card fraud with your issuer, then consider filing a complaint with the CFPB because they can mediate disputes.
• If your personal information may have been exposed, then monitor all your financial accounts and credit reports closely because this helps detect further fraudulent activity.
• If you are unsure about your rights regarding credit card fraud, then consult the Fair Credit Billing Act (FCBA) or a consumer protection agency because understanding your rights is crucial.
• If you find multiple suspicious inquiries on your credit report after reporting fraud, then dispute these inquiries with the credit bureaus because they may indicate identity theft.
• If you are consistently seeing fraudulent activity despite taking steps to secure your accounts, then consider seeking professional advice from a credit counselor or legal expert because more complex fraud may require specialized assistance.
• If you have automatic payments set up on a compromised card, then be prepared to update those payment methods once you receive your new card because missed payments can harm your credit score.
• If the fraud is part of a larger identity theft scheme, then consider placing a fraud alert or credit freeze on your credit reports because this can help prevent future fraudulent accounts from being opened.

FAQ

Q: How quickly do I need to report credit card fraud?

A: Report it immediately. Federal law limits your liability for unauthorized charges, but you must notify your credit card issuer promptly.

Q: What is my liability for fraudulent charges?

A: Under federal law, your maximum liability for unauthorized charges on your credit card is typically $50, and many issuers waive this entirely if you report the fraud promptly.

Q: Will reporting fraud hurt my credit score?

A: Reporting fraud itself does not hurt your score. However, if fraudulent charges lead to missed payments or high balances that are not resolved, that can negatively impact your score.

Q: How long does a credit card fraud investigation take?

A: Investigations can vary, but many issuers aim to resolve them within a few billing cycles. They should provide you with an estimated timeline.

Q: Do I need to file a police report for credit card fraud?

A: It’s not always required for simple credit card fraud, but it can be helpful, especially if identity theft is involved or if your issuer requests it.

Q: What’s the difference between credit card fraud and identity theft?

A: Credit card fraud is when someone uses your credit card without permission. Identity theft is a broader crime where someone uses your personal information (like your Social Security number) for fraudulent purposes, which can include opening credit cards.

Q: How can I prevent credit card fraud?

A: Protect your card information, monitor your statements regularly, use strong passwords and two-factor authentication for online accounts, and be wary of phishing attempts.

Q: What should I do if my debit card is used fraudulently?

A: Report it to your bank immediately. Federal law offers protections, but you generally have fewer days to report unauthorized debit card transactions than credit card ones to ensure full protection.

Q: Can a fraudster open new accounts in my name?

A: Yes, if they have enough of your personal information. This is why monitoring your credit reports is crucial after discovering credit card fraud.

Q: What is a credit freeze?

A: A credit freeze restricts access to your credit report, making it very difficult for anyone to open new credit in your name. You can temporarily lift it if you need to apply for credit.

What this page does NOT cover (and where to go next)

• Detailed legal advice on consumer protection laws.
• Where to go next: Consult with a consumer protection attorney or legal aid society.
• Specific steps for reporting fraud on international credit cards.
• Where to go next: Contact your card issuer’s international customer service or the relevant banking authority in the card’s country of origin.
• In-depth analysis of how fraud impacts credit scores over the long term.
• Where to go next: Research credit scoring models or consult with a credit counseling agency.
• Guidance on recovering from extensive identity theft beyond credit card fraud.
• Where to go next: Visit the Federal Trade Commission’s IdentityTheft.gov website or contact a specialized identity theft recovery service.
• Tax implications of financial fraud or identity theft.
• Where to go next: Consult with a tax professional or refer to IRS publications on fraud and identity theft.