UNAUTHORISED TRANSACTIONS
Unauthorised transactions and in particular, credit card fraud,
are on the increase. This fact sheet explains how to prevent
unauthorised transactions and what to do when they occur.
This fact sheet is for information only. It is recommended that you
get legal advice about your situation.
CASE STUDY
FACT SHEET
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CREDIT & DEBT
HOTLINE ON
1800 007 007
Carlos was at a restaurant with his new girlfriend Jenny.
He decided to pay his half of the bill by credit card. He was
shocked and embarrassed, when the waiter came back and
told him the credit card transaction had not been approved.
Jenny offered to pay for the meal. Carlos was very upset, as
he knew he had $2000 in available funds in his credit card
account.
Carlos rang the bank to find out what had happened. He was
told there had been a lot of activity on his credit card in the last
week and now the balance was over the limit by almost $1000.
Carlos told the bank that none of these transactions had been
authorised by him. He had not used his credit card for over
a week. Carlos was told to review his credit card statement
and let the bank in writing know which transactions were not
authorised.
WHAT IS AN UNAUTHORISED TRANSACTION?
An unauthorised transaction is one you did not agree to allow. This
is the critical question in determining whether you are liable for
the transaction amount. As a general rule, you are not liable for
unauthorised transactions. Although there are circumstances where
you may be held liable for some or all of the transaction (see below).
Financial Rights Legal Centre Inc.
ABN 40 506 635 273
To explain it is more useful to give examples of when a transaction IS
authorised:
For deposit accounts:
Fact sheets are information
only and should not be relied
upon as legal advice. This
information only applies to
NSW.
●●
You use your PIN to access money from your account
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You complete and sign a cheque in favour of someone
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You sign a deposit slip to withdraw money from your
account
©2014 Financial Rights
●●
You give your ATM Card and PIN to someone else to access
your account
All rights reserved.
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FINANCIAL HARDSHIP
TRANSACTIONS
For credit card accounts:
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You use your PIN to authorise a credit card purchase
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You sign a credit card slip
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You give your credit card details over the telephone or Internet
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You present your card for payment (with or without signature)
If you did not authorise a transaction then you should seek a refund from
your financial institution for the amount of that unauthorised transaction.
See Making a Complaint below on how to seek a refund.
FACT SHEET
If you have authorised the transaction and did not receive the goods and
services you paid for then as a general rule you cannot seek a refund
from the financial institution. You must complain to the merchant to
get a refund. The only possible exception is when you pay for goods and
services using your credit card. Then you may be able to get your financial
institution to “chargeback” the amount. See Fact Sheet: Chargebacks for
more information.
WHAT IF THERE IS AN UNAUTHORISED TRANSACTION ON MY
ACCOUNT?
Always check your account statements to check if there are any
unauthorised transactions on your account.
Step 1: You need to urgently ring your financial institution and tell them
that there is an unauthorised transaction on your account as soon as you
notice it. Do not delay!
Step 2: In some circumstances you should immediately put a “stop” on
your account (for example if your card has been stolen or it appears that
someone else may be using your card details).
Step 3: You must also write to your financial institution confirming when
you rang them and told them about the unauthorised transaction and
what the transaction was. This letter must be sent prior to the due date
for payment on your credit card statement. Keep a copy of this letter.
MAKING A COMPLAINT
If the financial institution believes you are liable and you do not agree you
should:
Step 1: Complain to your financial institution, listing the reasons why the
transaction was unauthorised and why you should not be held liable. This
should be done immediately as different time limits apply.
Keep a copy of this letter.
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FINANCIAL HARDSHIP
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Step 2: If the financial institution does not resolve your complaint within a
reasonable time (for example 30 days), you should make a complaint to an
external dispute resolution scheme. The relevant schemes are:
██
Financial Ombudsman Service of Australia (Ph 1800 367 287 www.
fos.org.au). Also see Fact Sheet: Dispute Resolution
██
Credit & Investments Ombudsman (Ph 1800 138 422 www.cio.org.
au). Also see Fact Sheet: Dispute Resolution
You should always lodge your complaint as soon as it is clear that you
cannot resolve your dispute with your financial institution as time limits
apply to your right to complain.
FACT SHEET
IN WHAT CIRCUMSTANCES COULD I BE HELD LIABLE FOR AN
UNAUTHORISED TRANSACTION?
You may be held liable for any unauthorised transaction if:
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You contributed to the loss on the balance of probabilities. An
example of this would be writing your PIN on your ATM Card or
on a document you keep with it.
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You keep your passwords saved in a mobile device which is
stolen and used to make an unauthorised transaction.
●●
In the case of unauthorised credit card transactions, you
delayed unreasonably in notifying the financial institution of the
unauthorised transaction.
This is a guide only. If the financial institution is claiming you are liable for
an unauthorised transaction you should seek legal advice. See Factsheet:
Getting Help for details.
HOW CAN I REDUCE THE CHANCE OF UNAUTHORISED
TRANSACTIONS ON MY ACCOUNT?
You should:
●●
Keep your PIN or password secret. Do not use a PIN someone
could guess, for example your birthday or part of your name.
●●
Never write your PIN or password on your card or on a
document kept with your card. If possible memorise your PIN
and do not write it anywhere. Do not let anyone see you entering
your PIN/password at an ATM or EFTPOS machine
●●
Immediately report any irregularity, such as a merchant who
passes your card through more than one piece of equipment,
or retains your card for an unreasonably long period when
accepting payment, to your financial institution.
NEED SOME MORE HELP?
See Fact Sheet: Getting Help for a list of additional resources.
Last Updated: September 2015
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FINANCIAL HARDSHIP
TRANSACTIONS