How to cancel an unauthorized pending charge on your credit card

You may have tried to cancel a pending charge on your credit card at some point. It could be because you disputed the charge, and were looking to have the amount credited back to your account.

What if you see an unauthorized charge that is pending? Dealing with a pending charge that is fraudulent, or that you didn’t authorize, is a bit different from dealing with a disputed charge.

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Typically, when you see a pending charge that you would like to dispute, your issuer will advise you that it will not be able to help you with issues relating to pending charges. Issuers know that a pending charge could be for a different amount when it ultimately posts. For instance, when you eat out at a restaurant, the posted charge will likely be different from the initial pending charge because you added a tip for the wait staff.

That’s why the issuer will ask you to sort out issues about pending charges with the merchant. In case the charge is unauthorized, the merchant might be willing to reverse the charge so that it doesn’t go any further. On a darker note, it might be that the merchant is an accomplice to the unauthorized charge and won’t help you sort out the issue.

Make sure the charge is unauthorized

Before you contact your card issuer, make sure that the charge is indeed unauthorized or fraudulent. With so many data breaches occurring these days, it is indeed a possibility that your card information was compromised and a fraudster used your card details for their own benefit. Or you could have actually lost your physical card and it got into the hands of an unscrupulous person.

However, it could be that, in a case of so-called “friendly fraud,” it is a charge that you did indeed make, but you don’t recognize. For instance, the merchant name could be different on the charge. This could happen in case the merchant does business in one name and has a different corporate identity that it uses for billing purposes. Or the merchant could have billed through an agency. That’s why it’s a good idea to hold on to merchant receipts for a while in case such issues arise.

Also, be sure that no one else who is an authorized user on the card actually incurred this charge.

Get in touch with card issuer immediately

Once you have ascertained that a charge is indeed unauthorized, you should get in touch with your card issuer right away. Sometimes, fraudsters will make minor purchases to test your card. If those go through, they will then proceed with larger purchases. So be vigilant even if you see small charges you don’t recognize.

Call your card issuer and notify the representative about your suspicion. If the issuer is convinced that a transaction is indeed fraudulent, it will likely close your account to prevent further misuse. It will also launch a fraud investigation. In the meantime, you will also be issued a replacement card with new information so that you can continue with your regular card use. It could also transfer your account history and any rewards you’ve accumulated to the new account.

You may need to file a police report to facilitate a fraud investigation. Also, note that card issuers typically have a zero-liability fraud policy so that you will not be held liable for any unauthorized charges on your card. Moreover, the Fair Credit Billing Act also gives consumers some rights relating to unauthorized charges. For one, you cannot be held liable for more than $50 in such charges.

To exercise your FCBA rights, you could follow up with a letter to the card issuer at the address you have for “billing inquiries.” And remember to keep a copy for your records. The issuer will have to investigate the matter and get back to you within 90 days.

To be vigilant, you might want to put in a fraud alert with the major credit bureaus, or even put in a credit freeze so that nobody can get new credit in your name.

Bottom line

If you have a pending charge on your credit card that you suspect to be fraudulent, first verify that it is indeed unauthorized activity. After confirming that, see if the merchant can reverse the charge for you. Even if the merchant gives you a credit, you should immediately follow up with your card issuer to notify it about the fraud and exercise your rights.

Contact me at pthangavelu@redventures.com with your credit card-related questions.