Yes, you can sue a company for unauthorized charges, and for most people the right venue is small claims court. Federal laws like the Fair Credit Billing Act and the Electronic Fund Transfer Act cap your personal liability and let you recover damages when a company or card issuer breaks the rules, and state consumer protection statutes often add stronger remedies on top. Before a court will take you seriously, though, you have to dispute the charge through your bank or card issuer first, and you have to file within one year of the violation.
Dispute the Charge Before You Sue
A formal dispute with your bank or card issuer is the fastest way to get your money back, and courts expect you to try it before filing suit. The rules depend on which type of account was hit.
Credit Card Charges
The Fair Credit Billing Act caps your liability for unauthorized credit card use at $50, and most major card networks waive even that.1Cornell Law School / LII. Fair Credit Billing Act (FCBA) To trigger those protections, send a written dispute to your card issuer within 60 days of the statement date showing the charge. Include your name and account number, identify the charge, and explain why you’re disputing it.2Office of the Law Revision Counsel. 15 U.S. Code 1666 – Correction of Billing Errors While the issuer investigates, it cannot try to collect the disputed amount or report it as delinquent.
Debit Card and Bank Account Charges
The Electronic Fund Transfer Act covers unauthorized debit card transactions, ATM withdrawals, and electronic transfers.3Cornell Law School Legal Information Institute (LII). Electronic Funds Transfer Act Timing drives everything. Report a lost or stolen card within two business days and your liability is capped at $50. Wait longer but still report within 60 days of your statement, and your exposure jumps to $500. Miss the 60-day window entirely and you can be on the hook for the full amount of every unauthorized transfer that occurred after that deadline.4Office of the Law Revision Counsel. 15 U.S. Code 1693g – Consumer Liability This is where most people get hurt: they don’t check statements regularly, and by the time they notice, the clock has run out.
What You Need to Prove in Court
If the issuer sides with the company, or the company itself keeps charging you, a lawsuit becomes a real option. You need to establish three things: the charges were unauthorized, you suffered actual financial harm, and you took reasonable steps to resolve the problem before filing.
Evidence that the charges lacked your consent is the foundation. That might mean showing you never signed up for a service, that billing continued after you cancelled, or that charges appeared from a merchant you’ve never dealt with. Courts also expect proof that you tried the available channels first, whether that’s contacting the company, filing a chargeback, or complaining to a regulator.
You don’t need to prove the company acted maliciously. Under both the FCBA and the EFTA, a company that fails to follow the statutory dispute procedures is liable whether or not the noncompliance was deliberate.
Check Your Contract for an Arbitration Clause
Before drafting anything, pull up the terms of service or account agreement you accepted. Many consumer contracts contain mandatory arbitration clauses that push disputes out of court and into private arbitration, and many also include class action waivers that stop you from joining other affected consumers.
One carve-out is worth looking for: a lot of arbitration clauses specifically exempt small claims court. If your unauthorized charges fit within your local small claims limit, you may be able to sue there even when the contract otherwise requires arbitration. Some contracts also give you an opt-out window, typically 30 to 60 days after signing up, during which you can reject the arbitration requirement entirely.
Build Your Evidence
Documentation is what separates claims that get resolved from claims that get dismissed. Start collecting as soon as you notice the problem:
- Bank and credit card statements showing the disputed charges, with dates, amounts, and merchant names.
- Emails, chat transcripts, letters, and notes from phone calls with the company, including dates and representative names.
- Confirmation emails or screenshots proving you cancelled before the charges appeared.
- Records from your bank showing you filed a chargeback, the outcome, and any provisional credits.
- The contract or terms of service in effect when the charges occurred. If the company changed its terms, keep both versions.
For recurring charges, proof you never gave informed consent carries extra weight. If a company buried subscription terms in fine print or made cancellation deliberately difficult, that evidence strengthens your case.
Small Claims Court or Civil Court
For most unauthorized charge disputes, small claims court is the practical choice. Filing fees are modest, usually from around $10 to a few hundred dollars depending on your jurisdiction and claim amount. You don’t need a lawyer, procedures are simplified, and cases usually resolve within weeks to a couple of months.
Every state sets its own dollar limit for small claims cases, and the limits vary widely. If your charges exceed the cap, you’ll have to file in a higher civil court, where the process is more formal and hiring an attorney becomes more practical.
Before filing, send a written demand letter. State the amount owed and give a specific deadline to pay. Many courts expect to see a good-faith effort to resolve the dispute, and a clear demand letter sometimes produces a settlement without a hearing. When you do file, you’ll need to serve the company’s registered agent, which you can usually find through your state’s secretary of state business search.
What You Can Recover
What’s available depends on which law the company violated and how badly it behaved.
EFTA Statutory Damages
If a company violates the Electronic Fund Transfer Act, you can recover your actual losses plus statutory damages between $100 and $1,000 per individual action, even when actual damages are small. The court can also award attorney’s fees and costs. In class actions, total statutory damages are capped at $500,000 or one percent of the company’s net worth, whichever is less.5Office of the Law Revision Counsel. 15 U.S. Code 1693m – Civil Liability
FCBA Forfeiture
When a credit card issuer fails to follow the FCBA’s investigation requirements, it forfeits the right to collect the disputed amount, up to a cap of $50.2Office of the Law Revision Counsel. 15 U.S. Code 1666 – Correction of Billing Errors That cap is separate from any actual damages. The broader Truth in Lending Act, which the FCBA sits under, also provides for statutory damages and attorney’s fees in certain cases.
Injunctive and Punitive Relief
Courts can order a company to stop a billing practice entirely, which matters most when the conduct affects many consumers. Punitive damages are also available where the misconduct was intentional or reckless, such as a company that knowingly billed customers for services they never authorized and then stonewalled refund requests. Punitive damages require a higher standard of proof and aren’t awarded routinely.
Subscription Traps and Recurring Charges
Recurring subscription charges are one of the most common sources of unauthorized billing complaints. Under the Restore Online Shoppers’ Confidence Act, any online seller using a negative option feature (where you’re charged unless you act to cancel) must clearly disclose the terms, get your express informed consent, and provide a simple way to cancel.6Federal Trade Commission. Restore Online Shoppers’ Confidence Act If a company charged you for a subscription you didn’t knowingly agree to, or made cancellation unreasonably difficult, those facts support both a chargeback and a lawsuit. Screenshot the cancellation screens, save any error messages, and document every step you took to stop the charges. Several states have passed their own cancellation laws that go further than ROSCA.
State Consumer Protection Laws
Federal law sets the floor. State unfair and deceptive practices statutes often provide stronger remedies. Roughly half of all states allow courts to award double or triple damages for deceptive business practices, and the vast majority allow recovery of attorney’s fees if you win. Those fee-shifting provisions matter because they make it financially viable for attorneys to take smaller cases on contingency.
State laws also tend to define “deceptive practices” more broadly than federal statutes, potentially reaching billing conduct that doesn’t fit neatly inside the FCBA or EFTA. If a company charged you for a service it never provided, misrepresented what it was charging you for, or made material pricing changes without adequate notice, your state’s consumer protection statute may be a more direct path than federal law. Check your state attorney general’s website or talk to a consumer protection attorney to see what’s available where you live.
You Have One Year to File
Both the FCBA and the EFTA impose a one-year statute of limitations for private lawsuits, running from the date the violation occurred.5Office of the Law Revision Counsel. 15 U.S. Code 1693m – Civil Liability The clock starts when the unauthorized charge hits your account, not when you discover it. State consumer protection claims may have longer deadlines, but waiting rarely helps. Evidence gets harder to gather and witnesses forget details.
Don’t confuse the dispute deadlines with the lawsuit deadline. You have 60 days from your statement to dispute a charge with your bank or card issuer, and up to a year to sue. Use the dispute process first, and if it doesn’t resolve things, file suit well before the one-year mark.