An unfamiliar charge on your credit card can be unsettling when you have no recollection of making the purchase. It may turn out to be a merchant error, an auto-renewed subscription or even a transaction made by a family member, but financial experts say that consumers should treat any unexplained charge as a potential fraud case until proven otherwise.
Under Reserve Bank of India (RBI) guidelines, cardholders who report unauthorised electronic transactions within three working days of receiving communication from the bank can qualify for zero liability, provided there has been no negligence on their part, such as sharing card credentials, PINs or one-time passwords (OTPs).
Why immediate reporting is crucial
Fraudsters often test stolen card details with small transactions before attempting larger purchases. Delaying action could allow additional fraudulent transactions to take place and may also affect the protection available to the customer.
The first thing cardholders should do after spotting a suspicious charge is block the card. Most banks now allow customers to instantly block or temporarily freeze their cards through mobile banking applications, internet banking portals or customer care helplines.
Once the card is secured, the transaction should be reported to the bank immediately. Customers should provide details such as the transaction date, amount, merchant name and transaction reference number, if available.
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It is also advisable to submit a written complaint through email, the bank’s mobile app or a formal letter, clearly stating that the transaction is unauthorised and requesting a chargeback investigation.
Understanding your rights under RBI rules
RBI’s framework on customer liability for unauthorised electronic transactions provides significant protection to consumers who act promptly.
Key provisions include:
Zero liability if the unauthorised transaction is reported within three working days of receiving the bank’s alert and the customer has not contributed to the fraud.
Many banks provide a provisional or “shadow credit” during the investigation process, often within 10 working days.
Banks are generally expected to complete the investigation and resolve the dispute within 90 days.
If customer negligence is established, such as sharing OTPs, passwords or card details, the customer may have to bear losses incurred until the fraud is reported.
These protections make early reporting one of the most important safeguards available to cardholders.
Not every unfamiliar charge is fraudulent
Consumers are often surprised to discover that suspicious transactions are not always criminal activity.
Some common reasons include:
- Subscription services automatically renew after a free trial period.
- Duplicate billing by merchants.
- International transactions where the merchant name appears differently on the statement.
- Charges made using a supplementary card issued to a family member.
- Currency conversion adjustments or delayed merchant settlements.
Before filing a dispute, cardholders should carefully review recent purchases, subscription services and supplementary card usage. However, if there is any doubt, it is safer to report the transaction and allow the bank to investigate.
Keep records and monitor your account
Documentation can strengthen a dispute claim. Consumers should preserve transaction alerts, account statements, screenshots, emails and any communication with merchants or the bank.
Where the issue involves non-delivery of goods, incorrect billing or a merchant dispute rather than outright fraud, customers should also contact the merchant and retain proof of communication.
Regular monitoring of credit card statements remains one of the most effective ways to detect unauthorised transactions before they escalate.
What if the bank does not resolve the complaint?
If the bank fails to resolve the issue within 30 days or the customer is dissatisfied with the outcome, the complaint can be escalated through the RBI’s Integrated Ombudsman Scheme.
Consumers can file complaints through RBI’s Complaint Management System without any fee. In cases involving suspected cyber fraud, reporting the incident to the National Cyber Crime Helpline (1930) or the government’s cybercrime reporting portal can also help initiate a wider investigation.
How to reduce the risk of card fraud
Cardholders can strengthen security by:
- Enabling SMS, email and app-based transaction alerts.
- Reviewing statements regularly.
- Setting transaction limits for online and international usage.
- Using virtual cards for online purchases where available.
- Avoiding storage of card details on unfamiliar websites.
- Never sharing OTPs, PINs or card credentials with anyone.
An unexplained credit card charge should never be ignored. Even if the transaction later turns out to be legitimate, reporting it quickly preserves your rights and ensures that potential fraud is investigated before further damage occurs.
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