In every credit card transaction within the digital economy today, issues of security and legality take a front row. One common question that pops up is whether a merchant service can charge your card when you have not given your explicit permission. This kind of unauthorized charge is illegal and a breach of regulatory guidelines and consumer trust.

Understanding Unauthorized Transactions

1. Legal Protections:

• Fair Credit Billing Act: The United States has some very stringent consumer protections in place against unauthorized charging on credit cards. If your card is charged for something you didn’t purchase, generally speaking, your liability won’t increase beyond $50.
• EFTA—Electronic Funds Transfer Act: For debit card transactions, the Electronic Funds Transfer Act gives similar protection. The maximum liability upon you is $50 if you report the loss or theft of your card within two business days.

2. Consent and Authorization:

For a charge to be valid, it needs prior explicit consent from the cardholder. This can be in the form of signing a receipt, authorizing a transaction online, or even verbal consent.

Mechanisms to Safeguard Against Unauthorized Charges

1. Improved security features:

• Encryption: The information regarding payment gets encrypted during transit to avert unauthorized access. This type of encryption ensures protection for sensitive information such as credit card numbers, etc., from interception.
• Tokenization: Under this, sensitive card details get replaced with an individual token, unusable outside that context of transaction usage, hence securing it further.
• PCI Compliance: The merchant service providers adhere to the payment card industry data security standard that enforces strict security measures during the processing, storage, and transmission of information related to cards.

2. Robust Authentication Methods:

• Two-factor Authentication: This process is normally implemented by many merchants and payment processors to add a layer of security. In this case, the cardholder needs further identification through another step, which may be entering a code sent to their mobile device or using biometric verification.
• Fraud Detection Systems: Financial institutions are currently using sophisticated algorithms and machine learning techniques in monitoring transactions for fraud.

What to Do if You Have Unauthorized Charges?

1. Contact the Merchant:

First, contact the vendor directly. Sometimes, unauthorized charges are simply errors or miscommunications on the part of the vendor, and sometimes they have simple, quick resolutions. Provide them with transaction details and request a refund if the charge was indeed unauthorized.

2. Notify Your Bank or Card Issuer:

If the vendor has no response or is unable to help you, contact your bank or credit card issuer immediately. Most of them have a fraud department that specifically looks into investigating claims such as yours. They may help you reverse that unauthorized charge and investigate it.+

3. Dispute the Charge:

Under FCBA, you have the right to dispute unauthorized charges. You will need to write a formal letter to your card issuer indicating the details of the charge, your dispute, and any supporting documentation. Send this letter within 60 days of receiving your statement that contains an unauthorized charge.

This post was written by a professional at Exzact Business Solutions. TRANSPARENT | AFFORDABLE | SIMPLE merchant services Pinellas County, Websites, and Social Media Done Right. Exzact Business Solutions are on a mission to educate local businesses to ensure smiles, savings, and solutions. Exzact clients save an average of 30% on their processing alone. No Contracts, Free Equipment, Local Support, No Rate Increases, and More. Exzact Business Solutions’ goal is to educate the local business community in order to ensure smiles, savings, and solutions. Exzact Business Solutions is an Independent Sales Organization with strategic partnerships dedicated to cultivating reliable and trustworthy relationships in the Payment Card Industry, allowing us to tailor products and services to the needs of each merchant. Contact EBS and see what a difference having the right advocate can make!