Unauthorized Transaction on Your Card? Here's What to Do

Last Updated: 3 Oct 2025

We all hear banks and credit card issuers constantly reminding us to be careful when using debit cards and credit cards. However, the people who perpetrate such frauds are learning equally fast and they find innovative ways to defraud you. Quite often you realize that the debit for a transaction was not authorized by you at all, nor did you swipe the card. What do you do in such cases?

Spot the Red Flags

The moment you see a mystery debit, you may ask yourself, what should I do if there is an unauthorized transaction on my card. First, examine the timestamp and merchant code on your statement; fraudsters often begin with a tiny “test” charge before draining larger sums.

Verify whether the card is still in your possession and whether any family member might have used it. Look at your text alerts, email notifications, and banking app feed for matching entries. If the same amount appears twice or is followed by rapid-fire deductions, treat it as confirmed fraud and move to containment within the first 30 minutes.

Freeze the Card Instantly

Open your mobile-banking app or call the helpline to place an immediate block so no further debits can go through the network. Use the navigation path that reads Report Unauthorised Transaction because tickets raised under this category receive top-tier priority and provisional credit under the zero-liability rule.

While the block is processing, jot down the transaction ID, merchant descriptor, and last four digits of the affected card. Capture screenshots; digital evidence added early to the case file makes chargeback approval smoother. Do not rely on spoken confirmations alone; insist on an SMS or email that confirms the card has been locked.

Notify and Document

You might wonder, how can I report a fraudulent transaction on my card while traveling outside my home country? The fastest route is the 24×7 international toll-free number embossed on the card’s backside. Quote your customer ID, state the exact amount lost, and request a complaint reference.

Follow up with an email attaching your screenshots plus a brief timeline of events: when you noticed the debit, where the physical card was stored, and the immediate steps taken. Most issuers must acknowledge disputes within 24 hours and resolve them within 10 working days unless they prove customer negligence. Keep every message for later escalation.

Escalate ATM Incidents

Skimming devices and pinhole cameras make ATM unauthorised usage distressingly common. If cash vanishes even though the plastic never left your wallet, file a written request at the branch to obtain CCTV footage covering at least one hour before and after the withdrawal. Present mobile-location logs or office attendance records as alibis to reinforce that any unauthorized card usage in ATM occurred without your presence.

Should the machine itself refuse service and display a confusing prompt such as why does the ATM says unauthorized usage, take a photo of the screen, keep the receipt (even if it shows an error), and report the malfunction to both your bank and the acquiring bank that owns the terminal. The burden of proof shifts to the institution once you provide evidence that the cardholder could not have executed the withdrawal.

Build Future Defenses

Change your PIN at a branch kiosk, not at a random street-side terminal, and enable two-factor authentication for all online purchases. Switch on transaction alerts for even the smallest amount, so any new anomaly stands out. Lower contactless-tap limits to a figure you can afford to lose, and disable international usage until the week you travel.

Use tokenized mobile wallets that mask the 16-digit number during checkout. Review statements weekly; early detection is still the single best answer to the silent question hidden in every scam: what should I do if there is an unauthorized transaction on my card?

Liability in Case of Unauthorised Transaction on Credit Cards

There are two scenarios here. If the transaction has happened due to the lack of due diligence or fraud by some employee of the bank, your liability is zero. One way to prove such charges is to ensure that all online credit card transactions are only approved based on the OTP received on the mobile. That can be a good way to ward off such fraud.

The other scenario is when the transaction has happened due to your own negligence. You may not have realized about a skimmer in the ATM, or you may have responded to phishing emails. In such cases, your liability is zero if you inform the bank within 3 days of the transaction. This is something you must strictly adhere to.

In case you report the unauthorized transaction between 4-7 days from the actual transaction, your liability will be what the bank decides or the value of the transaction, whichever is lower. Anything above 7 days, the liability is decided by the bank.

Card issuers even call up the customer before authorizing large international transactions on the internet. These are additional safety checks you can use.

Liability in Case of Unauthorised Transaction on a Debit Card

In the case of credit cards, Visa and MasterCard allow you to cancel the transaction after it is taken to the dispute tribunal. Such transactions are reversed immediately. But the problem with a debit card is that the transaction is debited to your bank account.

In India, debit cards have become popular due to the natural aversion to credit. How do you handle debit card fraud? Like in the previous case, the first thing to do is to inform the bank. If you have an online app on your smartphone, you can first block the card or change your PIN before complaining to the bank.

RBI has set limits to liability in case of different bank accounts. For example, your maximum liability in a zero-balance basic bank account is Rs 5,000. The liability for such fraudulent usage can go as high as Rs 10,000 in the cases of other bank accounts. In the case of larger value current accounts, liability can go up to Rs 25,000.

When you report a fraudulent transaction to the bank immediately, the burden of proof falls on the bank. The bank is absolved only if it can prove that you were complicit in the fraudulent transaction. In case you find the bank unnecessarily delaying the resolution, you can approach the bank ombudsman. If you are not happy with the ombudsman ruling, you can reach out to the appellate authority within 30 days. Usually, funds will come back to you if it was genuinely outside your control.