What counts as criminal fraud? Any unauthorized use of your payment details by a third party is considered an act of fraud. Additionally, criminal fraud can also refer to someone using your identity to make fraudulent purchases, bank transfers, or other questionable activity. 

You’re insulated against liability for most acts of criminal fraud perpetrated against you. When an unauthorized purchase is discovered, you should report the incident to the card network and the Federal Trade Commission. You can also contact the bank to have the charge reversed.

Here are a few common ways in which you can be targeted:

• Account Takeover Fraud (ATO): This occurs when cybercriminals take control of a consumer’s account details to make fraudulent purchases, access additional accounts, or use those accounts to infiltrate outside accounts. Fraudsters employ a variety of methods to achieve this data, from data breaches to phishing scams.
• Synthetic Fraud: Rather than impersonate a single person, the fraudster combines pieces of data stolen from multiple individuals to create a fake (synthetic) persona. This fake user identity is then used to open accounts or go on a shopping spree, leaving the bill to whichever individual holds the corresponding Social Security number.
• Clean Fraud: The fraudster uses stolen card data to illegally buy goods or services. At that point, however, the transaction information is manipulated to bypass fraud detection devices. The name refers to the fact that the transaction appears “clean” and will not be picked up by fraud filters, blacklists, or other online fraud detection tools.

It’s important to remember that anyone can be a victim of fraud. Cybercriminals are very skilled at mining, selling, and using data to defraud the public. You should immediately examine any unfamiliar purchase you find on your credit or debit card statement. If fraud is suspected, reported to the above channels as soon as possible. 

The authorization request is a phase in the transaction process. These are “behind-the-scenes” chargebacks; in most cases, disputes tied to authorization errors will be initiated by your bank, without your involvement. Examples include:

• Transactions processed without valid bank authorization
• Transactions processed without a valid authorization response from the bank (i.e. no “approval” message was received)
• Transactions processed without asking the bank for authorization
• Transactions processed with an expired or declined card (forced or manual transactions processed after the transaction was declined)

These instances are more common when transaction information is entered manually, rather than through a point-of-service (POS) terminal. 

Frankly, processing errors are quite common. The simplest reason for this is that all businesses are operated by human beings, and all human beings are fallible. If a merchant submitted the transaction late for processing, used the incorrect currency, or processed the same transaction twice, you’d be entitled to dispute the transaction. 

Other examples of processing errors you are encouraged to dispute, include:

• Incorrect Amount: The amount charged to your card was more than the value of the transaction in question.
• Payment Errors: Your card was charged twice for the same item, the wrong card was charged, or you were billed for items you didn’t order.

Subscription services produce recurring revenue, lead to “stickier” customers, and can largely be set on autopilot. From a billing perspective, however, they’re not without their pitfalls. Merchants may have difficulties managing subscription upgrades and downgrades, handling subscriptions in different currencies, responding to evolving consumer needs, or reminding customers about their upcoming payments.

Subscription errors happen if:

• The merchant failed to cancel your subscription, resulting in extra charges.
• The merchant confused your subscription request with another customer’s.
• You were charged repeatedly for the same service during a single time period.
• You subscribed to a basic plan, but you were charged for a premium one (or vice-versa).
• The merchant charged you a subscription fee but didn’t offer the service you paid for.
• The merchant has difficult-to-understand cancellation procedures and policies.

This is a pretty vague category, but the vagueness is deliberate. Shipping and fulfillment is a complex process, and there are a lot of things that can go wrong.

Just a few examples of merchant errors that fall within the fulfillment and shipping sphere of disputes include:

• Basic Fulfillment Errors: You paid for one item but received an entirely different item that you did not order. This can also include wrong colors, sizes, and other fulfillment errors.
• Inventory Errors: Items that you ordered were canceled or not in stock, but your transaction was processed anyway.
• Shipping Errors: The item was shipped to the wrong address, shipped notably late), or never arrived at all.

Product due diligence is becoming easier by the day thanks to social shopping, online reviews, and user-generated content, and well-informed shoppers will not settle for less.

A product’s price, its effectiveness during use, its durability, and how it holds up against a buyer’s expectations pre-purchase all contribute to how satisfied a customer will be with their item. A merchant whose products are unable to tick all of these boxes may experience disputes related to product quality issues. Examples include:

• Defective Products: The product was manufactured incorrectly or was damaged while in transit.
• Counterfeit Goods: The buyer unknowingly purchased a counterfeit goods at the price of an original one.
• Post-Purchase Malfunctions: For example, you buy a phone online. Six months after you start using the phone, its battery overheats, and the device dies.
• A Product is Difficult to Use: You buy a product, but the user manual is incomprehensible. You can’t figure out the product’s features.
• Overpromising & Under-Delivering: You’re dissatisfied with a product because a merchant exaggerated its effectiveness when marketing it.

This can be a touchy subject between consumers and merchants. The vast majority of sellers, both in-store and online, are legitimate and eager to work with buyers when issues arise to avoid a chargeback.

Most legitimate merchants would be happy to talk with cardholders to resolve an issue. In the event of merchant abuse, though, you’re going to have trouble pinning that merchant down for a response, so a chargeback may be necessary.

In these cases, you may need to provide a little more information to the bank when requesting a chargeback:

• Misrepresented Products: When an item varies significantly from the advertised product you purchased or arrives as a completely different item from what you ordered — this is a legitimate reason to dispute the charge.
• Items Never Arrived: If you can prove that the item you ordered was never sent to you, you are entitled to dispute the charge.
• Service Not Provided: Same as the situation above, if you paid for a service you didn’t receive and can prove it with verifiable evidence, you are entitled to dispute the charge.
• Merchant Failed to Refund: You did contact the merchant and arrange a refund for an item that didn’t live up to your expectations, but the merchant failed to give you your money back.