How to Dispute Unauthorized Credit Card Transactions With Your Bank in the Philippines

I. Overview

Unauthorized credit card transactions are a common problem in the Philippines, especially with the growth of online shopping, contactless payments, and digital wallets. When this happens, you are not automatically liable for every fraudulent charge—but you must act quickly and follow proper procedures.

This article explains, in a Philippine legal and regulatory context:

  • The laws and rules that protect you
  • What counts as an “unauthorized” transaction
  • Your duties as a cardholder
  • The step-by-step process to dispute transactions with your bank
  • What to do if the bank mishandles or denies your complaint
  • Preventive and practical tips

This is for general information only and is not a substitute for tailored legal advice.

II. Legal and Regulatory Framework

Several Philippine laws and regulations are relevant when dealing with unauthorized credit card transactions:

  1. Republic Act No. 8484 – Access Devices Regulation Act of 1998

    • Covers credit cards and other “access devices.”
    • Penalizes fraudulent use, possession, and trafficking in stolen or counterfeit credit cards.
    • Imposes duties on issuers (banks and other financial institutions) to exercise due diligence and maintain systems to prevent and detect fraud.

  2. Republic Act No. 11765 – Financial Products and Services Consumer Protection Act (FCPA)

    • Strengthens the powers of the Bangko Sentral ng Pilipinas (BSP) and other regulators to protect financial consumers.

    • Requires banks to:

      • Have clear complaint-handling mechanisms;
      • Treat customers fairly and transparently;
      • Provide timely resolution of complaints, including disputes over unauthorized transactions.

  3. BSP Regulations and the Manual of Regulations for Banks (MORB)

    • BSP issues circulars and regulations governing credit card operations, e-payments, and consumer protection.

    • These typically require:

      • Secure authentication measures;
      • Clear terms and conditions on liability for unauthorized transactions;
      • Proper dispute resolution procedures;
      • Internal controls against fraud and cyber risk.

  4. Republic Act No. 7394 – Consumer Act of the Philippines

    • Protects consumers from unfair and unconscionable sales or credit practices.
    • Can apply when merchants or issuers engage in unfair treatment, misrepresentation, or abusive collection practices.

  5. Republic Act No. 3765 – Truth in Lending Act

    • Requires lenders (including credit card issuers) to disclose finance charges, interest, and other costs so consumers can understand their obligations.

  6. Republic Act No. 8792 – E-Commerce Act and RA 10175 – Cybercrime Prevention Act

    • Provide legal recognition to electronic documents and transactions.
    • Penalize certain online fraud and hacking activities, which often underlie unauthorized card transactions.

  7. Data Privacy Laws (RA 10173 – Data Privacy Act)

    • Require banks and merchants to protect your personal and card data.
    • If your card details were stolen due to negligence in data handling, this may factor into liability and enforcement actions.

III. What Is an “Unauthorized” Credit Card Transaction?

Generally, a transaction is unauthorized if it was made without your knowledge and consent, and not by anyone who is legitimately allowed to use the card.

Common examples:

  • Lost or stolen card used by an unknown person
  • Card-not-present fraud: someone uses your card details online or over the phone without your knowledge
  • Account takeover: someone gains access to your online banking or card account and performs transactions
  • Cloned or skimmed card: data stolen from ATMs, POS terminals, or compromised merchants
  • Phishing or social engineering: fraudsters trick you into giving card details, which they then use without your genuine consent

Not necessarily “unauthorized” (often just “disputed”)

These may not qualify as unauthorized in the strict sense, even if you are unhappy with them:

  • You gave your card to someone (friend, relative) and they spent more than agreed.
  • You knowingly entered card details on a website but changed your mind later.
  • You agreed to a free trial that converted into a paid subscription, but you did not read the cancellation terms.
  • You forgot about a recurring charge (like streaming services, apps, or subscriptions).

These can sometimes be disputed (e.g., under merchant terms, product quality issues, non-delivery), but they are not “unauthorized” in the legal sense because you originally consented to the arrangement.

Banks distinguish between:

  • Fraud/unauthorized transactions – focus of this article; and
  • Merchant disputes – issues with delivery, quality, or subscription terms where you usually need to talk to the merchant first.

IV. Your Duties as a Cardholder

Under your cardholder agreement and under general principles of law, you are expected to:

  1. Keep your card safe

    • Don’t lend it out.
    • Don’t leave it unattended (e.g., in cars, on tables, photocopiers).

  2. Protect your PIN and authentication details

    • Don’t write your PIN on the card or store it with the card.
    • Don’t share OTPs, CVV, or passwords.
    • Turn on transaction alerts (SMS, email, app).

  3. Monitor your statements and alerts

    • Regularly review your monthly statement and transaction notifications.
    • The card agreement usually gives you a fixed number of days (often 20–30 days from statement date) to contest a transaction.

  4. Report suspicious activity immediately

    • Most banks will limit your liability if you report loss or unauthorized transactions without delay.
    • Delayed reporting can be considered negligence and may reduce your protection.

Failure to exercise due care can lead to the bank claiming “gross negligence”, which may affect whether you are liable for part or all of the loss.

V. Step-by-Step Guide: What To Do When You See an Unauthorized Transaction

Step 1: Secure your account immediately

  • Call your bank’s hotline using the number on the back of the card or from the official website/app.

    • Report that you suspect unauthorized/fraudulent transactions.
    • Ask to block the card and request card replacement.

  • If available, use your bank’s app or online banking to:

    • Lock or freeze the card;
    • Disable international or online transactions.

Document the call:

  • Note date and time, name or ID of the agent, and any case reference number.

Step 2: List and document all questionable transactions

  • Go through your latest statement and transaction history.

  • List down for each suspicious item:

    • Transaction date and posting date
    • Merchant name and location (if indicated)
    • Amount
    • Currency (for foreign transactions)
    • Remarks or reference numbers

Check also for:

  • Recurring charges you do not recognize
  • Small “test” charges (sometimes fraudsters test the card with small amounts)

Step 3: Gather supporting evidence

Prepare:

  • Screenshots of SMS or app alerts showing the transaction
  • Copies of your billing statements
  • Any proof that you were not in that place or using that merchant at that time (e.g., you were at work, in another city, or have receipts from a different location)
  • Police report (if card was physically stolen) – some banks require or at least encourage this

Step 4: Submit a formal dispute to the bank

Even if you already called, you usually need a written dispute. Most banks accept disputes through:

  • Branches (forms you can fill out)
  • Email to their official customer care address
  • In-app/online banking dispute forms

Your written dispute should include:

  1. Your full name and contact details
  2. Credit card number (usually masked; follow bank instructions)
  3. Statement period concerned
  4. Detailed list of disputed transactions
  5. Clear statement that these transactions are unauthorized and that you did not receive any benefit from them
  6. Attached supporting documents
Sample structure (simplified)

I am writing to formally dispute the following unauthorized transactions charged to my credit card account. I did not authorize these charges, did not share my card or PIN/OTP with any person, and did not receive any goods or services corresponding to these transactions. I request that the bank reverse these charges and conduct a full investigation.

(Then attach the table of disputed items.)

The bank should provide a reference number or acknowledgment that your dispute has been received.

Step 5: Cooperate with the bank’s investigation

The bank may:

  • Ask you to fill out a specific dispute form or affidavit.
  • Request additional documents (IDs, police report, affidavit of loss, etc.).
  • Temporarily suspend billing or collection for the disputed amount while the case is under investigation (though this depends on their policy; always confirm).

You should:

  • Respond within the deadlines they give.
  • Keep copies of all documents you submit.

Step 6: Monitor updates and billing

While investigation is ongoing:

  • Continue paying undisputed amounts on time to avoid interest and penalties.

  • Keep an eye on whether:

    • The bank applies provisional credit (temporary reversal); or
    • Continues to bill you but flags the amount as “under dispute.”

Check each new statement to ensure no further unauthorized transactions appear.

VI. Time Limits and Deadlines

  1. Time to report/dispute

    • Cardholder terms usually state that you must report any unauthorized or incorrect entries within a specific period (e.g., 20–30 days from statement date).
    • If you fail to do so, the bank may treat the statement as conclusively correct.

  2. Chargeback windows

    • For Visa, Mastercard, and other networks, banks have limited time to raise a chargeback with the acquiring bank/merchant (often around 90–120 days from transaction, depending on rules and reason code).
    • This is why banks often emphasize that you must dispute promptly.

  3. Bank’s resolution timeline

    • Under consumer protection principles, banks are expected to resolve complaints within a reasonable period and to inform you of the status.
    • Under RA 11765 and BSP’s consumer protection framework, banks are required to have clear complaint handling and internal turnaround times, which are usually disclosed in their policies.

VII. Who Bears the Loss?

Liability for unauthorized transactions depends on the facts and on the card agreement, but general principles are:

  1. Transactions after you report the loss or fraud

    • Once you have formally reported that the card or account is compromised, you generally should not be liable for subsequent unauthorized charges, unless there is collusion or fraud on your part.

  2. Transactions before you report

    • If the bank’s systems were properly designed and there is no negligence on their part, they may argue that you bear some or all of the loss prior to the report.
    • However, if there is evidence of system weaknesses, merchant negligence, or data breach, you may argue that the bank or merchant should absorb the loss.

  3. Gross negligence or fraud by cardholder

    • If you:

      • Shared your PIN, CVV, or OTP;
      • Gave your card to others;
      • Fell for obvious scams after warnings;

    • The bank can claim gross negligence and refuse to reverse the charges or may only give partial relief.

  4. Bank or merchant negligence

    • If unauthorized transactions happened because of:

      • Poor verification by the merchant (no signature, no ID checks when required);
      • Weak authentication or system vulnerabilities at the bank;

    • You may argue that the bank or merchant should bear the loss, relying on RA 8484, RA 11765, and general obligations of diligence.

VIII. If the Bank Denies Your Dispute or Mishandles It

If you are not satisfied with the bank’s action:

1. Escalate within the bank

  • Write a more formal letter to:

    • The bank’s Customer Experience/Complaints Handling Unit; or
    • The Compliance Officer or Data Protection Officer (if data breach is involved).

  • Ask for:

    • A written explanation of their findings;
    • The basis in the card agreement, policies, or regulations.

2. File a complaint with the Bangko Sentral ng Pilipinas (BSP)

For banks and credit card issuers supervised by BSP:

  • You may file a complaint with BSP’s financial consumer protection unit (historically through written complaints, hotline, or online portal).

  • Provide:

    • Copies of your dispute letters
    • Bank replies
    • Statements showing the contested transactions
    • Any evidence of negligence or unfair treatment

BSP does not usually act as a court, but it can:

  • Call the bank’s attention
  • Require explanation
  • Check for regulatory violations
  • Order corrective actions if there is non-compliance with BSP rules or RA 11765

3. File a complaint with other agencies (if applicable)

  • National Privacy Commission (NPC) – if your data was mishandled or leaked.
  • Department of Trade and Industry (DTI) – if a merchant engaged in unfair trade practices.

4. Judicial remedies

If the financial loss is substantial and negotiations fail:

  1. Civil case

    • To recover the amount you believe you should not be liable for.
    • Basis can include breach of contract, negligence, or unjust enrichment.

  2. Criminal complaint

    • Against the fraudster (if identified) for violations of RA 8484, cybercrime laws, or the Revised Penal Code (e.g., estafa, theft, fraud).
    • This is usually filed with the Office of the City/Provincial Prosecutor or law enforcement agencies (e.g., NBI or PNP cybercrime units).

Legal action can be time-consuming and costly, so many cardholders try to exhaust administrative and internal remedies first.

IX. Special Situations

1. Online marketplace and e-wallet transactions

If the transaction involves:

  • Marketplaces (e.g., major e-commerce platforms)
  • Payment processors (e.g., payment gateways)
  • E-wallets linked to your card

Then:

  • You may also need to file a parallel dispute with the platform (for non-delivery, fake items, etc.)
  • But fraud/unauthorized use of the card itself is still primarily disputed with your card-issuing bank.

2. Overseas and foreign currency transactions

  • Fraudulent transactions abroad are still disputable.
  • Expect more time for investigation due to cross-border coordination.
  • Exchange rate differences and foreign transaction fees may be involved in the reversal.

3. Supplementary cards

  • Transactions by a supplementary cardholder are generally treated as authorized because the principal cardholder requested that card to be issued.
  • If the supplementary cardholder denies the transaction, the merchant or bank may treat it as an internal issue between principal and supplementary cardholder, not as “unauthorized” in the legal sense.

4. Corporate or company cards

  • Liability and dispute processes may be governed by internal company policy and the corporate card agreement.
  • The employer may be the one interfacing with the bank.

X. Evidence and Documentation: What You Should Keep

To build a strong case:

  • Cardholder Agreement and updates/notices from the bank
  • All billing statements covering the period of disputed transactions
  • Screenshots of SMS/app alerts
  • Copies of emails, letters, and dispute forms submitted
  • Notes of phone calls (date, time, name/ID of agent, reference numbers)
  • Police report or blotter (if applicable)
  • Proof of your location or activities at the time (travel documents, work logs, receipts)

The more structured and organized your documentation is, the better your chances of a favorable resolution.

XI. Practical Tips to Prevent Unauthorized Transactions

  1. Enable transaction notifications

    • Real-time SMS or app alerts for every use of your card.

  2. Use strong, unique passwords for online banking and card apps.

  3. Avoid public Wi-Fi when accessing financial accounts.

  4. Check URLs and emails carefully

    • Watch out for phishing sites pretending to be your bank.
    • Banks will never ask for your full password or OTP via email, SMS, or unsolicited calls.

  5. Use virtual cards or card tokens where available

    • Some banks offer virtual card numbers for online purchases.

  6. Review your statements monthly

    • Treat it as non-negotiable financial hygiene.

  7. Report immediately

    • Even if you’re not sure, call and ask. Early detection often limits loss.

XII. Summary

Disputing unauthorized credit card transactions in the Philippines rests on three pillars:

  1. Legal protection – RA 8484, RA 11765, BSP regulations, and related laws require banks to act fairly, maintain secure systems, and provide clear complaint mechanisms.
  2. Cardholder responsibility – You must safeguard your card, monitor your account, and report suspicious transactions promptly.
  3. Process and documentation – A prompt, well-documented dispute filed with your bank, followed by escalation to BSP or other agencies if necessary, is your main path to relief.

If the amount is significant or the bank continues to hold you liable despite strong evidence of fraud, it is wise to consult a Philippine lawyer familiar with banking, consumer, and cybercrime laws to evaluate your specific case and possible legal remedies.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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