Recognizing an unauthorized transaction
Generally, any banking or credit card transaction that you didn't make or approve is an unauthorized transaction.
Unauthorized transactions may occur when you lose your debit or credit card, or mobile device, or someone steals them. A mobile device may include a smart phone, tablet or smart watch. Someone could also steal your identity and use your information to make transactions without your knowledge or consent.
Each financial institution may define unauthorized transactions differently. Read your credit card, debit card and account agreements carefully. Make sure you understand what your financial institution considers an unauthorized transaction.
Reporting an unauthorized transaction
If you think someone made an unauthorized transaction using your card or account, or if there’s a risk of this happening:
- change your passwords and PINs immediately
- notify your financial institution or credit card issuer immediately
- report any transactions you didn't make or approve
- check your credit report for any credit you didn't apply for or any suspicious activity
- continue to monitor your accounts after you report it
In some cases, you may need to report the incident within a specific amount of time. Your account agreement specifies this. If you don’t, you may be held responsible for the transaction and you may not get the amount back.
For deposit accounts, like chequing or savings accounts, you usually have 30 days after the date of your statement to dispute a transaction. However, this could differ from one financial institution to another.
When you report an unauthorized transaction, federally regulated financial institutions must always investigate the incident. They must take all relevant factors into account before finding you at fault. This is regardless of the method or technology used to process the unauthorized transaction.
Paying for an unauthorized transaction
In most cases, you will not be held responsible for transactions you didn't make or approve. This is if you took the necessary precautions to safeguard your account information.
Unauthorized debit card transaction
You’re protected against unauthorized transactions when you use debit card services:
- in store
- at a point-of-sale terminal
- at an ATM
- online
You should immediately report any unauthorized transaction to your financial institution.
If you took the necessary steps to protect your PIN, you should get your money back.
You're not responsible for losses that result from circ*mstances beyond your control, which include:
- technical problems. For example, the ATM didn’t give you the full amount of cash you asked for, but still deducts the amount requested from your account
- unauthorized transactions. As long as you didn’t contribute to the loss by not taking the necessary steps to protect your PIN
- someone forced you to use your card
- someone obtained your PIN by looking over your shoulder. This is called shoulder surfing
You could be responsible for losses in situations where you contribute to or encourage unauthorized use of your card.
You could be liable for losses if you:
- use your date of birth or telephone number as your PIN
- share your PIN with someone, even if it’s a family member
- keep a written record of the PIN close to the card or write your PIN on the back of the card
- didn't report your lost or stolen card in the amount of time specified in your card agreement
- refuse to cooperate in an investigation of unauthorized use of your card
- made fraudulent deposits with your card
- didn't take the necessary steps to protect your PIN
Read your card or account agreements to make sure you know your responsibilities when using a debit card.
Unauthorized credit card transaction
When an unauthorized transaction is made with your credit card, your maximum liability, by law, can't be more than $50.00 unless you demonstrated gross negligence. Your credit card agreement must explain your maximum liability if your card is used without your permission.
Visa, Mastercard, American Express and Interac have committed to protect you against financial loss if your credit or debit card is used without your permission. According to this public commitment, you will not be held responsible for the unauthorized transactions.
Learn more about these commitments and policies.
Filing a complaint about an unauthorized transaction
All federally regulated financial institutions (FRFI) must have a complaint-handling procedure in place.
Learn how to file a complaint with your financial institution.
Related links
- Debit card fraud
- Credit card fraud
- Checking for errors on your credit report
- Protecting your financial information in the event of a data breach
