When you report a fraudulent charge, a bank’s vocabulary can feel like a second language. These plain-English definitions cover the words you will hear from a fraud department.
In a nutshell
- An unauthorized transfer on a debit account counts as an error under Regulation E, which sets investigation timelines and limits on what you can owe.
- Credit card billing errors must be disputed in writing within 60 days of the statement showing the charge, and issuers have up to 90 days to resolve them.
- Reporting a lost or stolen card within two business days caps your liability at $50 for unauthorized transfers under Regulation E.
- Phishing, smishing and vishing are scam emails, texts and calls designed to collect the details scammers need to reach your accounts.
- Banks may ask for a signed fraud affidavit or police report, but they cannot delay a Regulation E investigation while waiting for your paperwork.
Banks and card issuers use their own vocabulary when you report a problem, and much of it comes straight from federal regulations. Knowing what terms like notice of error and provisional credit mean makes it easier to describe what happened and to understand what your bank must do next. Here are the words you are most likely to hear during a fraud claim or dispute.
Unauthorized, Fraudulent and Disputed Charges
Unauthorized charge. A transaction you did not permit. On a debit account, an unauthorized electronic fund transfer is one situation that counts as an “error” under Regulation E and triggers a bank’s investigation duties.
Fraudulent charge. A charge made through deception, such as with stolen card details. In everyday bank conversations, “fraudulent” and “unauthorized” often describe the same problem.
Billing error. A credit card term. Federal rules define billing errors to include charges you did not accept, goods or services not delivered as agreed, wrong amounts, and unauthorized charges. Disputes about the quality of something you accepted are not billing errors.
Disputed charge. Any charge you ask the card company to review. Reasons can include a wrong date or amount, a return credit that never posted, a payment that was not credited, or a charge you do not recognize.
Phishing, Smishing and Vishing
Phishing. An email scam in which a message appears to come from a well-known source, such as a bank or mortgage company, and asks for personal identifying information. Scammers use what they collect to open new accounts or get into existing ones. The FTC advises not responding to emails or pop-up messages that ask for personal or financial information.
Smishing. Scam text messages designed to get you to hand over personal details.
Vishing. Scam phone calls in which the caller pressures you to share sensitive information.
Do this
If a text, email or call asks for account details, do not respond or interact with the sender. Contact your bank using the number on your statement or the back of your card.
Card Skimming and Account Takeover
Card skimming. A technique that captures card numbers and PINs when a card is used at a terminal, sometimes through a device attached to the machine. Skimmed data can later be used to make unauthorized transactions.
Account takeover. When a scammer gains control of an account you already have, often using details gathered through one of the scams above.
Identity theft. When someone uses your personal information, such as your bank account or Social Security number, without your permission. You can report it at IdentityTheft.gov and get a personalized recovery plan.
Regulation E and Error Resolution
Regulation E. The federal rule that implements the Electronic Fund Transfer Act, a law passed in 1978 to protect consumers using electronic transfers. Regulation E applies to transfers made through ATMs and debit card purchases at merchants, some government benefit accounts, direct deposits, gift cards, payroll cards, prepaid accounts, and remittance transfers. Not every payment type falls under it; wire transfers follow their own rules, and wire transfer fees explains what to ask before sending one.
Error resolution. The procedures a bank must follow when a consumer alleges an error, such as an unauthorized or incorrect transfer, a transaction missing from a statement, or a bookkeeping mistake. For most claims, the bank must determine whether an error occurred within 10 business days of receiving your notice and report the results within three business days after finishing. The procedures apply even if you have already closed the account.
Notice of error. Your formal report of the problem. It must reach the bank within 60 days after the statement showing the error was sent, allow the bank to identify your account, and explain why you believe an error exists. An oral notice counts, and it is effective even without your account number if the bank can identify you another way. The bank may ask you to confirm an oral notice in writing within 10 business days, but it cannot delay the investigation while waiting for that statement.
Liability tiers. Caps on what you can owe for unauthorized transfers after a lost or stolen access device, the regulation’s term for a card, code, or other means of account access. If you report within two business days of learning of the loss or theft, your liability is limited to the lesser of $50 or the transfers that occur before notice. Later reporting can raise the cap to $500 or, in some situations, leave it unlimited. Careless behavior, such as writing your PIN on the card, cannot be used to impose liability beyond these limits, and your account agreement cannot exceed them either.
Provisional Credit and Chargebacks
Provisional credit. A temporary credit a bank may post to your account for the disputed amount while the investigation continues. Practices vary by bank and by claim, so ask whether it applies to your case and what happens if the bank later finds the transaction was valid.
Chargeback. A reversal of a card transaction processed through the card network after a dispute. The process runs through the card issuer and differs from a Regulation E claim on a debit account.
Credit Card Disputes and the Fair Credit Billing Act
Fair Credit Billing Act. The federal law that treats certain disputed credit card charges as billing errors and spells out how to challenge them.
60-day dispute period. A credit card billing error has to be challenged in writing within 60 days after the issuer sends the first statement that shows it. Send the letter to the address the issuer lists for billing disputes or errors, which is usually not the payment address. Some issuers accept phone or online disputes, but a follow-up letter secures the full protection of the law. Once the issuer receives your dispute, it must acknowledge it in writing within 30 days unless the problem is already resolved, and it has up to two billing cycles, and never longer than 90 days, to finish resolving it.
Withheld payment. During the investigation, you do not have to pay the disputed amount or related finance charges, but you must pay any part of the bill that is not in question. Legal protections for credit cards are stronger than for debit cards, though some debit card companies voluntarily offer more than the law requires.
Affidavits and Police Reports
Affidavit of fraud. A signed statement describing the fraud that a bank may ask you to complete as part of a claim. As with any Regulation E claim, the bank cannot put the investigation on hold while waiting for your paperwork.
Police report. An official record of the crime filed with local law enforcement. Some banks and card issuers ask for one when processing fraud claims; policies vary, so ask what documentation your bank needs.
These terms come up most often after money has already left your account. If a payment went astray because you initiated it yourself, what happens when you send money to the wrong person covers a related problem with different rules. And if you are weighing how much cash to keep in the account while a dispute is pending, FDIC insurance explains how deposits are protected when a bank itself fails.
Good questions
What is the difference between a fraudulent charge and a billing error?
On a credit card, billing errors include unauthorized charges, charges for goods never delivered as agreed, and charges for the wrong amount. Disputes about the quality of something you accepted are not billing errors.
How fast must a bank investigate a debit account dispute?
Under Regulation E, the bank generally must determine whether an error occurred within 10 business days of receiving your notice, then report the results within three business days after completing the investigation.
Does closing my account end a fraud claim?
No. A bank must still follow the error resolution procedures when you properly report an error, even if the account has already been closed.
What is provisional credit?
It is a temporary credit a bank may post for the disputed amount while the investigation continues. Ask your bank whether it applies to your claim and what happens if the transaction is later found to be valid.
This guide is general information, not financial or legal advice. Bank fees, account terms and screening policies vary by bank and change over time, so check the account’s fee schedule and terms before you open it. For federal rules, see the Consumer Financial Protection Bureau and the FDIC.