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How to undo unauthorized credit card charges by a family member

The Fair Credit Billing Act protects consumers against unauthorized use, which is fraud, and many card issuers also have zero liability policies


A 44-year old son used his parents’ credit card, which they use for essentials, to rack up gambling charges. What rights do they have to dispute the charges and ensure their card use is not affected?

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Credit card fraud is an alarming issue, and in most cases you are likely to think the perpetrator is a stranger.

Unfortunately, that’s not always the case. For one, reader Jamie’s 44-year old brother used their parents’ American Express credit card and gambled $10,674 on a PayPal account.

Jamie writes, “My parents are retired and don’t have that type of money to pay. My brother obviously does not have any way of paying it back.”

The parents are worried about how they are going to pay this on time, considering that they use this credit card to live month to month. Jamie would like to know what their rights are so their credit card use is not affected.

Check out all the answers from our credit card experts.

Ask Poonkulali a question.

Federal law protects consumers against unauthorized use

Jamie, the Fair Credit Billing Act protects your parents against unauthorized use of their card. Since it appears your brother rang up those charges without your parents’ knowledge, they are not liable for them under the FCBA and can dispute them. The law limits your parents’ liability for unauthorized charges to $50.

In addition to the FCBA protections, Visa, Mastercard and many credit card issuers offer zero liability policies for fraud, which means that those reporting fraud may not be responsible even for the $50 liability the FCBA sets up.

See related: Should I periodically replace my card to deter fraud?

Dispute fraudulent charges with the credit card company

Consumers should write the credit card company so that it receives their complaint within 60 days after they received the first bill with the unauthorized charges. The card issuer is required to acknowledge this complaint within 30 days of receiving it and also resolve the issue in 90 days or less after getting the complaint.

The card issuer will investigate the issue, and the consumer does not need to make any payments on the disputed amount while this is going on. However, they will have to keep up with their payments on any other charges on the bill that are not disputed.

While the investigation is ongoing, the card issuer is not allowed to take any action to collect on the disputed amount.

Jamie, it appears your parents don’t need to worry about paying off the disputed amount while the investigation is going on, but the card issuer could cut down their credit line by the amount of the dispute. That could be an issue considering that they use the card to live month to month.

Other FCBA rights for those who file such disputes include:

  1. The creditor is not allowed to report you as delinquent on the debt.
  2. It cannot ask you to speed up your debt payments.
  3. It cannot close your account, or restrict it, because you have filed a complaint.
  4. The card issuer also cannot deny you credit, or discriminate against you otherwise, just for taking legal FCBA action.

See related: Should I allow a merchant to make copies of my credit card?

Should you report a family member to the police?

It looks like your parents have adequate protections against the unauthorized use. That’s the good news.

Where it gets murky is the card issuer could ask your parents to file a police report as part of the investigation. In that event, your parents will have to decide whether they want to formally implicate your brother.

They will have to decide if they want to let this slide, or take action to protect their own interests and finances. Considering that your brother is an adult and should have known better, they would be justified in going along with the investigation. However, that’s their call.

In the meantime, what they could do is talk to an attorney and get a better feel for the situation and how their filing a police report might hurt your brother, if it came to that. They could then decide how best they would like to proceed.

Jamie, I hope you are able to help them sort things out!

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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