Can a Company Charge Your Credit Card Without Authorization?

A company cannot legally charge your credit card without your permission, and if it happens, federal law caps what you personally owe on unauthorized credit card charges at $50.¹ In practice, most cardholders end up paying nothing thanks to the Fair Credit Billing Act and the zero-liability policies the major card networks layer on top of the statute. The harder question is usually whether a charge is truly unauthorized, because a lot of surprising charges turn out to be ones you agreed to somewhere along the way.

Charges That Look Unauthorized but Are Not

Before you file a dispute, rule out the everyday explanations. A charge that has a legitimate basis will not be reversed, and pursuing it can waste days you might need for a real dispute.

Recurring subscriptions. Sign-up terms almost always include automatic renewal at the end of each billing period. Streaming services, cloud storage, and software licenses are frequent sources of forgotten renewals.
Free-trial conversions. Many services take your card number at sign-up and start billing the moment the trial ends. If you did not cancel in time, the charge is authorized.
Pre-authorization holds. Hotels, rental car companies, and gas stations place temporary holds to confirm you can cover the final bill. A hold is not a completed charge, but it reduces your available credit and can look unfamiliar until the merchant finalizes or releases it.²
Unfamiliar merchant names. Statements often show a legal or parent-company name rather than the brand you know. Searching the merchant name together with the dollar amount usually clears this up quickly.

If none of those fit, treat the charge as unauthorized and move on to your legal remedies.

What You Can Be Held Responsible For

Under the Truth in Lending Act, your liability for unauthorized use of a credit card cannot exceed $50, and even that cap applies only when the issuer has done several things: given you notice of potential liability, provided a way to report loss or theft, and offered a method for identifying authorized users. If the issuer has not met those conditions, you owe nothing.¹

Once you report a card as lost or stolen, your liability for any charges after that report is zero. The statute also states that outside the narrow circumstances where the $50 cap applies, “a cardholder incurs no liability from the unauthorized use of a credit card.”¹

Card networks go further than the law requires. Visa’s Zero Liability Policy covers cards that are “lost, stolen or fraudulently used,” with exclusions for certain commercial cards and anonymous prepaid cards like gift cards.³ Mastercard’s policy is similar and covers unauthorized purchases in stores, online, by phone, and at ATMs, with the same carve-outs.⁴ Both require that you took reasonable care of the card and reported the fraud promptly. These are voluntary network policies rather than law, but for most consumer credit cards they mean the real cost of unauthorized use is $0.

How to Dispute an Unauthorized Charge

Start With the Merchant

A phone call or email to the merchant often resolves billing errors within a few days. Duplicate charges, processing mistakes, and unclosed accounts are common, and a cooperative merchant can refund you faster than any formal process. Write down who you spoke with, when, and what they promised. If the informal route fails, that record supports a formal dispute.

File a Formal Dispute With the Card Issuer

If the merchant will not help, or the charge is straight fraud, the Fair Credit Billing Act lets you dispute the charge with your issuer. Your written notice must reach the issuer within 60 days of the date the first statement showing the charge was mailed to you.⁵ Missing that window does not eliminate every protection you have under the Truth in Lending Act, but it does strip away the specific procedural rights the FCBA provides. Treat the deadline as firm.

Most issuers accept disputes by phone or through their app, and that is fine for routine cases. For complicated or high-dollar disputes, send a physical letter by certified mail with return receipt so you can prove when the issuer received it. Send it to the “billing inquiries” address on your statement, which is often different from the payment address.

Your notice should include:

Your name and credit card account number
The dollar amount and date of the disputed charge
The merchant name as it appears on your statement
A plain explanation of why the charge is wrong
Any supporting documents, such as receipts, cancellation confirmations, or screenshots of the terms you agreed to

What Happens After You File

Once the issuer has your notice, federal law sets the timeline. The issuer must send you a written acknowledgment within 30 days. It then has two full billing cycles, and no more than 90 days, to investigate and either correct the charge or explain in writing why it believes the charge is valid.⁵

During the investigation, you can withhold payment on the disputed amount without damage to your credit. You still have to pay the rest of your bill on time. The issuer cannot close or restrict your account solely because you filed a dispute, and it cannot report the disputed balance as delinquent while the investigation is pending.⁵

If the investigation confirms the charge was unauthorized, any temporary credit becomes permanent. If the issuer sides with the merchant, it will reinstate the charge and send you a written explanation. You can then request copies of the evidence the issuer relied on and, if you still disagree, escalate.

When the Issuer Will Not Follow the Rules

A creditor that fails to comply with the FCBA’s dispute-resolution requirements forfeits its right to collect the disputed amount and any finance charges on it, up to $50. That forfeiture applies regardless of whether the underlying charge turns out to be valid.⁵ In a lawsuit, a consumer can also recover actual damages, statutory damages equal to twice the finance charges on the disputed transaction, and attorney’s fees.

If you think your issuer is stalling or ignoring the rules, file a complaint with the Consumer Financial Protection Bureau at consumerfinance.gov/complaint. The CFPB forwards complaints to the company, which generally responds within 15 days.⁶ The complaint does not replace a lawsuit, but it creates a federal record and often shakes loose a resolution faster than continued rounds with customer service.

Debit Card Charges Are a Different Story

The protections above are specific to credit cards. If an unauthorized charge hits your debit card, the money leaves your account immediately and the rules are less forgiving. Debit cards are governed by the Electronic Fund Transfer Act, which ties your liability to how quickly you report.⁷

Within 2 business days of learning about the fraud: liability capped at $50.
After 2 business days but within 60 days of your statement: liability up to $500.
After 60 days: the bank has no obligation to reimburse losses it can show would not have occurred had you reported sooner. You could lose the full amount.

A $3,000 fraudulent credit card charge costs you at most $50, and usually nothing. The same charge on a debit card, reported three months later, could cost you the full $3,000. Report suspicious debit card activity the day you notice it.⁷ The EFTA does allow extensions for extenuating circumstances like hospitalization or extended travel, but the statute only calls for a “reasonable” extension without defining the length.

1
Office of the Law Revision Counsel. 15 USC 1643 – Liability of Holder of Credit Card
2
Federal Trade Commission. Fair Credit Billing Act
3
Visa. Zero Liability
4
Mastercard. Zero Liability Protection Policy
5
Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
6
Consumer Financial Protection Bureau. Submit a Complaint
7
Office of the Law Revision Counsel. 15 USC 1693g – Consumer Liability