What Do I Do If Someone Uses My Credit Card Without Authorization?

Credit cards offer consumer protection on a level that debit cards do not. That’s the main reason money expert Clark Howard doesn’t want you to pay for things with a debit card.

Those protections aren’t unlimited, though. So what do you do if your card is lost or stolen and someone runs up charges on one or more of your credit cards? And what happens if it takes you time to notice?

That’s what a listener of the Clark Howard Podcast recently asked.

Someone Used My Credit Cards Without Authorization. What Do I Do?

What do I do if someone uses my credit cards without authorization?

That’s what a listener asked on the July 28 podcast episode.

Asked Alonso in Illinois: “I was recently released from prison. With your help, my credit score had been at 740.

“While incarcerated. my credit cards were being used without my knowledge or authorization. I believe my roommate got ahold of my personal property and had a shopping spree. One card had a $5,000 credit line and sued me for $3,500 — that’s when I found out about things.

“Fast forward to my release in 2023. I started contacting these institutions about my credit cards after obtaining my credit report. I am in $25,000 of debt. One bank person told me that since I didn’t catch it within 90 days than I am now on the hook for it. Tell me this isn’t true. Is there anything I can do? My credit score is now 550.”

Alonso is in an unusual and difficult situation. But Clark has advice for him. Also, a lot of the advice applies to anyone who runs into the misfortune of someone making unauthorized charges on one of your credit cards.

“I’m so glad you’re out of prison. I hope that your life is on a very positive path now and I know this pulls you down,” Clark says. “There you were with a solid, great credit score in the 700s to now 550. That’s hard.

“Your ability to dispute charges ends in 60 days, not 90. But this is a very unusual situation.”

Step 1: Dispute the Charges If You’re Still Within 60 Days

If you notice fraudulent charges on your card less than 60 days after they were made, you can dispute those charges. That’s why it’s important to check your monthly credit card statements and read through all the transactions.

Step 2: File a Police Report If You’re Outside of 60 Days

In Alonso’s case, that may not have been possible. Now he’s getting sued for $3,500 by a company that might get a judgment against him.

“See what legal rights you have. Because the one thing I don’t want you to have to do is to file for bankruptcy,” Clark says.

“Get on record with a police report that these were not your charges. You can’t accuse the roommate because you don’t know it was the roommate. But you can say that someone ran up debts as if they’re you.”

Step 3: Hire a Specialized Consumer Lawyer

From there, you’d normally hire a consumer lawyer. A legal specialist who can work on your behalf with these credit card companies.

“I don’t know if there’s any prison release program that you have been part of, an advocacy organization or whatever, that may be able to help you and that potentially would be at no cost,” Clark says.

Step 4: File for Bankruptcy

If none of the above steps work, you may have to consider filing for bankruptcy. That will make your financial life more difficult. But, Clark says, sometimes it’s necessary.

“This is a hard situation. I can’t tell you that the charges are not now considered under the law to be valid charges because they may be because of the period of not being challenged after 60 days,” Clark says. “It is a terrible circumstance.

“Do not let this discourage you. Do not let this keep you from the process of continuing to rebuild your life. And in the worst possible scenario, the result would be a Chapter 7 bankruptcy filing. But that would be the worst possible scenario. And that by itself in a situation like you described is not the end of the world.”

Final Thoughts

The best thing you can do if someone charges your credit card without authorization is to dispute those charges within 60 days.

It gets much more complex if you don’t notice or dispute those charges within that period. But you can still file a police report and hire a lawyer that specializes in consumer rights.