This page was originally published in early 2022 and features a story from a Bankrate reader during that time. The rest of the article has since been updated.

Key takeaways

  • If you noticed fraudulent charges on your credit card account, you should freeze your credit card and notify your bank right away.
  • Your bank should issue you a refund for the fraudulent charges — but what if it doesn’t?
  • If you’re dealing with a situation like Sara’s, where her mother’s bank refused to refund fraudulent charges, you can start by finding out why the bank refused your claim and then filing complaints with the proper agencies.

Identity theft comes in many forms, but the most common type is credit card theft. In 2023, identity theft made up 19.2 percent (1,036,903) of all consumer reports that the Federal Trade Commission (FTC) received, according to the FTC’s 2023 Consumer Sentinel Network report. Among those identity theft reports, about 40.2 percent (416,582) of them were about credit card theft. Credit card holders clearly need to be watchful if they’re going to avoid credit card fraud.

So, if you have been impacted by credit card fraud and reported the matter to your card issuer, having the bank refuse to entertain your fraud claim is adding insult to injury. Reader Sara writes that this is exactly what happened to her.

“My mother was in rehabilitation in August 2021, when someone apparently stole or cloned her card and used the card for approximately $500 in purchases,” Sara writes. She explains that her mother was bedridden at the time of the charges and could not have spent $500 on her Regions Bank Visa Credit Card in a three-day period at Walmart, Shell and CVS.

“They will not provide copies of the receipts either,” Sara writes. “My mother didn’t leave rehab at any time. She doesn’t drive. She had the card in her possession when I checked her out of rehab. What is my recourse? My mother is on a limited income. I suspect her card was cloned while she was in rehab.”

How do banks investigate fraud?

If you suspect you are the victim of credit card fraud, you have protections under the Fair Credit Billing Act. To access those protections, you should immediately contact your credit card issuer and dispute the transaction within 60 days from the date on your billing statement. Disputing the transaction will lead to an investigation. The same should be done for debit card fraud, especially since debit cards don’t have the same level of protections that credit cards do.

Reasonable dispute investigation

The law places certain responsibilities on the lender in investigating your claim of a fraudulent transaction, and it can’t just get away with a cursory review. Instead, it has to perform a reasonable dispute investigation. For instance, a reasonable investigation into this sort of dispute could involve the following:

  • Comparing the purchasing pattern for the claim, such as types and amounts of purchases, with the consumer’s previous purchases
  • Reviewing the place of delivery relative to the consumer’s home or business address
  • Considering where the purchases were made relative to the consumer’s address and typical shopping venues
  • Comparing the signature on any purchase receipts with the consumer’s signature
  • Asking for documentation to help verify the claim
  • Asking for a written, signed statement about the fraudulent transaction
  • Asking for a copy of any police report about the unauthorized transaction you may have filed
  • Requesting input on the person who allegedly committed the fraud or their authority to make use of your card

The issuer has a reasonable right to expect your cooperation in gathering this sort of input. But, it cannot automatically deny your claim because you did not provide some particular piece of information.

However, if the issuer doesn’t have enough information confirming the fraudulent transaction and you haven’t provided relevant information that would help build the case, the issuer could close the case due to lack of information.

Responding to a query for comment on Sara’s mother’s case, a spokesperson for Regions Bank noted: “Regions Bank is committed to helping protect customers from any attempts at fraud against their accounts. Our investigations are detailed and thorough as we work to get to the bottom of whatever may have transpired in any instance reported to us.”

What should you do if a bank refuses to issue a refund?

If your fraudulent transaction claim is denied by a bank, you should first find out why the claim was denied. For example, the bank might claim that you didn’t reasonably protect your identity or account, or it might even have concluded that you did make the purchases and are trying to get out of paying for them.

The silver lining is that you don’t have to prove your innocence. And in order to hold you liable for a fraudulent charge, the onus is on the issuer to prove its case.

While you gather information on your case from your bank, you should also do the following:

  • Start an appeal process. Issuers usually allow you to appeal their decision within a certain amount of time. You’re guaranteed at least 10 days from when you received the explanation, according to the FTC. Send them a letter stating that you’re appealing the bank’s decision and follow any other instructions the bank provides regarding appeals.
  • File a police report about the fraudulent transaction. You could even file a case with the Federal Bureau of Investigation if the amount involved is large enough.
  • File a complaint against your bank. A good way to get a bank’s attention is to file a complaint with its regulator.
  • File a complaint with government agencies. Filing a complaint with the Federal Trade Commission or the Consumer Financial Protection Bureau (CFPB) can also move your case along.

If you feel like you need more advice or want to better understand your legal rights, you could even talk to an attorney to get specific input about your case.

The bottom line

There are specific rules a bank must follow in looking into a claim of credit card fraud to ensure a reasonable investigation. Sara, in your situation, you should follow up with the Regions Bank dispute process to ask why your mother’s claim was denied.

If you are not satisfied with the bank’s response, you could file a complaint with the CFPB or the Federal Reserve Board, which regulates Regions Bank. Another recourse is to go to the Alabama State Banking Department with your complaint, since the bank is based in that state. You could also file a police report about your case or hire an attorney to give you specific advice.

If you suspect your mother’s card has been compromised, you should ask the bank to cancel it and issue a replacement card. If you don’t feel comfortable using that bank anymore, you can see whether your mother would prefer signing up for a new credit card from a different issuer altogether. I hope your mother’s fraud investigation gets settled to your satisfaction.