Electronic payments are a convenient way to pay your bills. Unfortunately, businesses sometimes take money from your account without permission. If this happens, it is critical that you react quickly to resolve the issue. Understanding unauthorized withdrawals and how to deal with them can save you a great deal of stress.
When a business takes money from your account without verbal or written consent -- be it a credit card or bank account -- it's called an "unauthorized debit." While fraud may be the first thing that comes to mind, don't panic. Unauthorized debits can happen for benign reasons. For example, if you cancel a subscription or recurring payment, it may take the card owner a little time to process the action. You may also still owe some money for the final billing cycle. Furthermore, mistakes do happen. The business may have made a processing error, or you may have done something wrong on the cancellation form.
Contact the Business
Contact the biller in question. If the debit transaction was made in error, you can settle the dispute with the business and get your money back. A reputable business will gladly cooperate to help you correct the issue since it wants to keep you as a customer. If the biller isn't cooperative, further action is needed.
Contact Your Institution
Speedy reactions matter when it comes to unauthorized debit. According to the National Automated Clearing House Association, you must dispute a charge within 60 days to avoid full liability. If you notify the institution within two business days, you will not be liable for more than $50. You may be asked to fill out a written statement for the unauthorized debit. The form contains specific questions, such as the amount of the transaction, the business claiming it, and the nature of the withdrawal. This is a legal document, so be honest and as accurate as possible.
Future Charge Prevention
Once you resolve the issue, you'll need to safeguard yourself from future unauthorized debits. One option is a zero liability guarantee, which comes with most credit cards. The bank or card issuer promises it won't allow any questionable charges to get through, and, if any do, you will be reimbursed. Also, check with your credit or debit card provider to see what safeguards they have in place. Companies generally monitor your card for unusual transactions, and will contact you for any direct debits that seem inconsistent with your purchasing habits.
- Navy Federal: Written Statement of Unauthorized Debit
- Finder: Dealing with Unauthorised Direct Debits from your Credit Card; May 2011
- Finder: Am I Entitled To a Refund If There’s a Fraudulent Transaction On My Debit Card?; May 2011
- Crimes of Persuasion: How to Get a Fraudulent Transaction Reversed When a Telemarketer Debits Your Bank Account With an Unauthorized Pre-Authorized Debit or Electronic Fund Transfer
- Consumer Financial Protection Bureau : Bank Accounts and Services
- How to Avoid Unauthorized Bank Transactions
- How to Close a Checking Account & Transfer Funds to a Different Bank
- How to Report Possible Identity Theft to the Credit Bureau
- Rules for ACH Reversal
- How to Cancel Payments Made on a Visa
- Do Credit Card Companies Really Investigate a Disputed Charge?
- Credit Card Dispute and Time Limit
- How Long Does it Take to Correct a Fraudulent Credit Card Charge?