Spotted an Unauthorized Charge in Washington? Know Your Rights & Recourse

Understanding Unauthorized Charges in Washington: Your Guide to Protection

Discovering an unauthorized charge on your bank statement or credit card bill can be frustrating, alarming, and often, confusing. In Washington State, consumers have robust protections under both federal and state laws, but knowing how to navigate these systems is key to successfully disputing these charges and recovering your money. This article will provide a clear, actionable guide for Washington residents facing such a situation, offering practical legal advice, outlining your rights, and explaining the steps you need to take.

What Qualifies as an Unauthorized Charge?

An unauthorized charge is any transaction on your account that you did not permit. This can manifest in several ways:

• 💸 Fraudulent Transactions: Someone uses your account information without your knowledge or consent (e.g., stolen credit card numbers, identity theft).
• 🚨 Errors: A merchant accidentally charges you twice, charges the wrong amount, or a banking error occurs.
• 🔄 Forgotten or Misleading Subscriptions: You signed up for a "free trial" that automatically converted to a paid subscription you didn't intend to continue, or you can't cancel a recurring charge.
• 🚫 Canceled Services or Products Not Delivered: You canceled a service or returned a product, but the charge was never reversed, or you were charged for goods/services you never received.
• 👨‍👩‍👧‍👦 Family Member Misuse: A family member (without explicit authorization or beyond agreed limits) uses your card or account.

It's crucial to distinguish between a charge you genuinely didn't authorize and one you simply regret making or forgot about. The former falls under the protections discussed here; the latter typically does not.

Your Federal Rights: The Foundation of Protection

Most unauthorized charge disputes are initially governed by federal laws designed to protect consumers in electronic transactions. These laws establish timelines, liability limits, and investigation procedures.

Credit Cards: The Fair Credit Billing Act (FCBA)

The FCBA (a part of the Truth in Lending Act) provides significant protections for credit card users. If you spot an unauthorized charge on your credit card:

1. 📝 Notification Deadline: You must notify your credit card issuer in writing of the billing error within 60 days after the first statement containing the error was mailed to you. While phone calls are a good start, always follow up with a written notice.
2. 🛡️ Limited Liability: Your maximum liability for unauthorized charges on a credit card is $50, regardless of how much was charged. Many issuers offer "zero liability" policies, meaning you pay nothing, but the FCBA sets the legal cap.
3. 🧐 Investigation Process: Once you report the error, the credit card company must acknowledge your complaint in writing within 30 days. They then have two billing cycles (but no more than 90 days) to investigate and resolve the dispute.
4. 💰 Provisional Credit: During the investigation, you do not have to pay the disputed amount (or any finance charges related to it). Many card issuers will grant you provisional credit for the disputed amount, removing it from your balance while they investigate.
5. ✅ Resolution: If the error is confirmed, the charge will be permanently removed. If the investigation finds no error, you will be notified in writing, and you'll be responsible for the charge, potentially with accumulated finance charges.

Debit Cards and Other Electronic Fund Transfers: The Electronic Fund Transfer Act (EFTA) / Regulation E

The EFTA (and its implementing regulation, Regulation E) protects consumers using debit cards, ATM transactions, and other electronic fund transfers (like ACH payments). The protections here are generally stricter about reporting times due to the direct access to your bank account funds.

1. ⏰ Critical Reporting Timelines:
   • 🚨 Within 2 Business Days: If you report an unauthorized debit card or ATM transaction within two business days of learning about it (or the date of the transaction, whichever is later), your maximum liability is $0.
   • ⏳ After 2 Business Days, Up to 60 Days: If you report after two business days but within 60 calendar days of your statement being sent, your maximum liability is $50.
   • 📉 After 60 Days: If you wait longer than 60 days from when your statement was sent to report an unauthorized electronic fund transfer, you could be liable for the entire amount of unauthorized transfers that occurred after the 60-day period and before you reported them. This is a significant risk, as continuous fraudulent charges could deplete your account.
2. 🔍 Investigation and Provisional Credit: Banks must investigate disputes promptly. They typically have 10 business days to investigate. If they cannot conclude within 10 days, they must provide provisional credit to your account within those 10 days, allowing you access to your funds while the investigation continues (up to 45 or 90 days for certain transactions, like new accounts or foreign transactions).
3. ✍️ Written Confirmation: Your bank may require you to submit your dispute in writing within 10 business days of your verbal report. Failure to do so could result in the provisional credit being reversed.

Washington State Specifics: Adding Layers of Protection

Beyond federal law, Washington State offers additional avenues for recourse, particularly through the Washington Consumer Protection Act (CPA), RCW 19.86.

The Washington Consumer Protection Act (CPA)

The CPA prohibits "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." While federal laws primarily deal with the bank/card issuer relationship, the CPA can apply directly to merchants or service providers who engage in deceptive practices leading to unauthorized charges.

Examples where the CPA might apply to unauthorized charges:

• 🚫 Deceptive Subscription Practices: A merchant uses misleading tactics to sign you up for a recurring charge that is difficult or impossible to cancel.
• 🛒 Hidden Fees: A business charges fees that were not disclosed or were intentionally obscured during a transaction.
• 🕵️‍♀️ Fraudulent Merchant Practices: A merchant repeatedly bills customers without their authorization, creating a pattern of deceptive trade practices.

The key advantage of the CPA is the potential for robust remedies:

• ⚖️ Actual Damages: You can recover the money you lost due to the unauthorized charge.
• 💰 Treble Damages: If the court finds the deceptive act was willful, they can award up to three times your actual damages. For private actions, there is a statutory cap of $25,000 for the trebled portion of damages. However, this does not limit the total award if actual damages are higher or if attorney fees are significant.
• 👨‍⚖️ Attorney Fees and Costs: This is a crucial aspect of the CPA. If you win your case, the business is often required to pay your reasonable attorney fees and court costs. This makes it more feasible for consumers to pursue smaller claims that might otherwise be cost-prohibitive.

Financial Exploitation of Vulnerable Adults (RCW 74.34)

In Washington, if an unauthorized charge involves the financial exploitation of a vulnerable adult (e.g., an elderly person or someone with a disability), more severe legal consequences and protections come into play. This statute defines financial exploitation broadly and allows for various remedies, including treble damages without the $25,000 cap that applies to general CPA actions, and criminal penalties. If you suspect an unauthorized charge is part of elder or vulnerable adult abuse, it’s imperative to contact Adult Protective Services (APS) and potentially law enforcement, in addition to following the dispute process with your financial institution.

Steps to Take: Your Action Plan

1. 👀 Review Statements Regularly: This is your first line of defense. Check your credit card and bank statements at least monthly (ideally more frequently for debit accounts) for unfamiliar transactions. Don't wait for your paper statement; use online banking.
2. 📸 Gather Evidence:
   • 📄 Bank/Card Statements: Highlight the unauthorized charge(s).
   • 📧 Emails/Texts: Any communication with the merchant or bank related to the charge.
   • 📝 Receipts/Invoices: Proof of legitimate transactions or cancellations.
   • ❌ Cancellation Confirmations: If disputing a recurring charge you tried to cancel.
3. 📞 Contact the Merchant First (Optional but Recommended): Sometimes, an unauthorized charge is simply an error or a recurring charge you forgot about. A quick call to the merchant can often resolve it without involving your bank or card issuer. Keep a record of the call (date, time, person you spoke to, outcome).
4. 🏦 Notify Your Bank or Credit Card Issuer IMMEDIATELY: This is the most crucial step. Speed is critical, especially for debit card transactions, to limit your liability.
   • 🗣️ Call Them: Explain the situation clearly. Get a reference number for your call.
   • ✍️ Follow Up in Writing: Even if you call, send a written letter (or use their online dispute form) to formally document your dispute. For credit cards, this is required by the FCBA to trigger its full protections. For debit cards, it might be required by your bank to solidify your claim. Send certified mail with a return receipt for critical disputes to prove it was sent and received.
5. 🗒️ Keep Detailed Records: Document every step:
   • 📅 Dates and times of calls.
   • 👥 Names of people you spoke with.
   • 📞 Reference numbers for disputes.
   • 📧 Copies of all correspondence (emails, letters).
6. 🚨 File a Police Report (for Fraud/Identity Theft): If the unauthorized charge is due to outright fraud or identity theft, filing a police report is essential. Your bank or card issuer may require it, and it provides an official record of the crime.
7. 🏛️ Report to Federal Agencies:
   • Federal Trade Commission (FTC): Report identity theft and general fraud at identitytheft.gov.
   • Consumer Financial Protection Bureau (CFPB): File a complaint against your bank or card issuer if they don't resolve your dispute satisfactorily at consumerfinance.gov/complaint/.
8. 🧑‍⚖️ Consider Legal Action (Especially Under CPA): If your dispute is denied, or if you believe a merchant has engaged in deceptive practices, consult with a consumer protection attorney. They can assess your case under the Washington CPA and other applicable laws.

Compensation and Remedies in Washington

When disputing an unauthorized charge, the primary goal is to have the charge removed or reversed. However, under Washington law, you might be entitled to more:

• 🔄 Charge Reversal: The most common outcome, the disputed amount is credited back to your account.
• 💸 Actual Damages: Under the CPA, you can recover any direct financial harm you suffered because of the unauthorized charge.
• 📈 Treble Damages (Up to $25,000 for Private Actions): If a merchant’s deceptive practice caused the unauthorized charge and was willful, a court can award up to three times your actual damages. For individual consumers, the trebled portion of the award is capped at $25,000. However, this cap does not limit the actual damages or attorney fees.
• 🤝 Attorney Fees and Costs: A significant benefit of the CPA is that if you prevail, the defendant (the merchant or entity that engaged in the deceptive practice) can be ordered to pay your reasonable attorney fees and court costs. This can make pursuing a claim economically viable even for smaller amounts.
• 🏛️ Injunctive Relief: In some cases, a court might order a business to stop its deceptive practices.

For example, if a Washington consumer was charged $500 monthly for a subscription they repeatedly tried to cancel, and the merchant deliberately made cancellation impossible (a deceptive practice), under the CPA, they could potentially recover the $500 x number of months (actual damages), plus up to $25,000 in treble damages, and their attorney's fees.

Common Mistakes to Avoid

• ⏰ Delaying Notification: This is the most critical mistake, especially with debit cards. Adhering to deadlines is paramount.
• 🚫 Not Following Up in Writing: While a phone call gets the ball rolling, a written dispute letter (especially for credit cards) is essential for triggering your full federal protections.
• 🗑️ Discarding Evidence: Keep all records. Without documentation, proving your case becomes much harder.
• 🛑 Giving Up Too Soon: Financial institutions and merchants might initially deny your claim. Persistence, proper documentation, and understanding your rights are key.
• 🤔 Assuming All Unauthorized Charges Are the Same: The rules differ significantly between credit and debit cards. Know which type of account is affected.
• 🤫 Not Reporting Fraud to Authorities: If actual fraud or identity theft is involved, always file a police report.

Key Deadlines to Remember

• 💳 Credit Cards (FCBA): 60 days from the statement date to send written notification of a billing error.
• debit_card Debit Cards (EFTA/Regulation E):
  • 2 business days from learning of the error for $0 liability.
  • Up to 60 days from the statement date for $50 liability.
  • Beyond 60 days: potentially unlimited liability for continuing fraud.
• ⚖️ Washington Consumer Protection Act (CPA): Generally, a four-year statute of limitations for filing a lawsuit from when the unfair or deceptive act occurred. However, for unauthorized charges, acting quickly according to federal guidelines is always better.

When to Seek Legal Help in Washington

While many unauthorized charge disputes can be resolved directly with your bank or card issuer, there are situations where consulting a consumer protection attorney in Washington is highly advisable:

• ❌ Dispute Denial: If your bank or card issuer denies your claim and you believe they are wrong, an attorney can review your case and advise on further steps, including filing a lawsuit.
• 😤 Deceptive Merchant Practices: If a merchant's actions that led to the unauthorized charge appear to be part of a larger pattern of unfair or deceptive practices, a CPA claim might be warranted.
• 💸 Significant Financial Loss: For large unauthorized charges or ongoing issues that cause substantial financial harm.
• 👴 Vulnerable Adult Exploitation: If the unauthorized charge involves the financial exploitation of an elderly or vulnerable individual, an attorney can help navigate the complex laws and ensure all protections are utilized.
• ⚖️ Complexity: If the case involves multiple parties, intricate transactions, or particularly aggressive pushback from the other side.

A Washington consumer protection attorney can help you understand your rights, evaluate the strength of your claim, assist with gathering evidence, negotiate with financial institutions or merchants, and represent you in court if necessary, potentially recovering not only your lost funds but also attorney fees and enhanced damages under the CPA.

Disclaimer: This article provides general information and is not intended as legal advice. Laws can change, and individual situations vary. For advice specific to your circumstances, please consult with a qualified attorney licensed to practice in Washington State. Reading this article does not create an attorney-client relationship.