How Do Banks Investigate Unauthorized Transactions?

If you’ve been a victim of credit card fraud, chances are, you’re losing your mind wondering who the criminal is and how you’re going to get your money back. You probably have a lot of questions as to how exactly the bank is going to find out who stole from you and what they are going to do to the person.

Credit card fraud cases increase by the minute and banks are looking for new and improved ways to reduce them. This article will discuss how banks investigate unauthorized transactions or disputes. And if you’re someone looking to scam your bank, there’s something in this article for you too.

How Do Banks Investigate Unauthorized Transactions?

The bank will first confirm that the cardholder was not involved in the fraud. To do this, they will ask the cardholder a series of questions to gather more information about the unauthorized transactions and look for fraud indicators like timestamps, IP addresses, location, and some other data to be sure that it isn’t a case of friendly or family fraud. The cardholder will also have to present their proof of the unauthorized transactions. More often than not, the bank will have an internal fraud investigator handle the case. After the transactions have been confirmed to be fraudulent, they will then notify law enforcement agencies – who will decide whether to open an investigation or not.

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How Long Does It Take for A Bank to Refund Stolen Money?

After reporting a credit card fraud, the bank has between 30 – 90 days to investigate and resolve the issue. In this timeframe, they have a 10-day deadline to either complete the investigation or request an extension. If the bank requires more than 10 days to investigate, they will have to temporarily refund any amount stolen from the victim’s account.

How Do Banks Investigate Disputes on Debit/Credit Cards?

If a customer files a dispute or complaint regarding a transaction on their debit/credit card, the bank will investigate the validity of the customer’s claim. The customer might claim that the transaction was not authorized or the product they purchased never arrived or it wasn’t in good condition. The bank will first check if it was a card-present or card-not-present transaction and if the transaction fits into the customer’s usual purchases.

This information will greatly influence the investigation and the final decision on how to resolve the dispute. The bank will then require proof of this claim from the customer and also contact the merchant in question to prove that the customer authorized the transaction. After this, the bank will make a decision based on the information gathered, whether to issue a chargeback on behalf of the customer or to reject the request.

Read also: How Often Do Credit Card Frauds Get Caught?

Can I Dispute A Debit Card Charge That I Willingly Paid For?

Yes, you can dispute a debit card charge that you willingly paid. This could be done for several reasons including bad service, damaged goods, services not rendered, or products not received. The process and time limit of disputing a non-fraud-related credit card charge would depend on the reason for the dispute.

For any kind of billing error, you would be required to send a letter to your issuer within 60 days and your issuer is expected to send a response letter to you within 30 days of receiving your letter.

For bad service, damaged goods, services not rendered, or products not received, you would be required to try to resolve the dispute with the merchant and try to get your money back. If that doesn’t work, you can then proceed to send a letter to your creditor’s billing department within 60 days explaining the dispute with evidence, relevant documents, pictures of damaged goods, etc. to support your claim. Remember to use certified mail and request a return receipt.

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Consequences of Lying About Unauthorized Charges

The consequence of lying about unauthorized charges could include 30 years in prison and a $1 million fine depending on the conditions surrounding your lie. Fraud can either be a misdemeanor offense or a felony depending on your location and the crime you are charged with. You could either be incarcerated, put on probation, forced to pay restitution, or fined if you are caught.


We hope to have answered the question ‘how do banks investigate unauthorized transactions?’ and many other questions you might have in this article. We have also provided you with some relevant information in the case of a transaction dispute. Feel free to ask more questions in the comments.