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Smart Money

Who Pays For Unauthorised Transactions?

Last updated

Pauline Hatch      

Someone getting hold of your card details and going on a spending spree is a scary prospect. But, there’s good news – most of the time, you won’t have to pay for the unauthorised transactions. Here’s a rundown of who pays what in the case of fraudulent spending. 

An “unauthorised transaction” is a charge that you didn’t give approval for, and may not even know about.

If your credit card has been stolen or your details nabbed online, it more often than not leads to unauthorised transactions. It’s worth noting there could be other times when your card is used without your consent (as anyone who’s left a toddler with an iPad finds out the hard way).

There’s basically three parties who could be left holding the bill when someone uses your card without your permission:

  1. Your bank/credit card issuer,
  2. You; or
  3. A third party.

Let’s take a look at when each of these could be held responsible for unauthorised charges.

Banks and Credit Card Issuers

Your credit card issuer protects you against most unauthorised transactions, particularly when it comes to card theft and fraud.

The MoneySmart website outlines a range of scenarios where getting your money back should be straightforward. That includes when a forged, expired or cancelled card is used, if a merchant incorrectly debited your account and if you have already told your bank that your card has been lost, stolen or otherwise compromised.

In addition to the bank’s policy, card processors like American Express, MasterCard and Visa also provide zero liability policies when you use your card, which means you should be able to get the money back when something does go wrong.


While the bulk of unauthorised transactions are covered by the protection policies mentioned above, there are certain conditions you have to meet to prove that you didn’t authorise a transaction.

The Consumer Credit Legal Centre has advised reviewing what counts as an authorised transaction before assuming money will be easily retrieved.

Basically, if you have presented your card for payment, signed a credit card slip or given your credit card details over the telephone or online, then you could be liable for charges directly related to this activity.

The problem, however, is that there are now more ways to pay by card and more places to store your details.

If you have an iTunes, PayPal or other online account with your credit card details stored on it, then anyone who accesses your computer could also make charges with your card.

There’s been a number of stories in the media about children racking up huge card bills via these sites. If it’s a family member, and you’ve given them permission to use your computer or other devices, then it’s harder to prove transactions were unauthorised.

One man in the UK even reported his son for credit card fraud in the hopes of recovering  £3700 (AU$5349) that was accidentally spent on game apps.

A Third Party

In some cases, a merchant or other third party will have to foot the costs of transactions you have not signed on for.

If the merchant acknowledges a mistake on their part, for example, they could help resolve the situation by reversing the charges.

Apple, for example, helped another UK couple recover £1700 that their five-year-old son racked up on an iPad.

MoneySmart also notes that even when you are legally liable for charges – as you may be in some of the scenarios here – “the amount you are liable for is subject to certain caps.”

Unauthorised Credit Card Transactions and the ePayments Code and

The Australian Securities and Investments Commission (ASIC) updated the ePayments Code on the 2nd June, 2022 which has some impact on unauthorised transactions. This brought it up to date to handle payments made on the New Payments Platform.

This code, which relates to all consumer electronic payments, is designed to make things clearer for everyone involved.

“The ePayments Code provides key consumer protections in cases of fraud and unauthorised transactions and plays an important role in the regulation of electronic payment facilities in Australia,” ASIC outlined in a statement about the new release.

ASIC chairman Greg Medcraft said the updated code could be easily read by cardholders to help better understand protection and liability when it comes to electronic transactions, including unauthorised ones.

“Our new Code sets out best practice in consumer protection and is product neutral and in plain English. It will encourage consumers to have confidence in our epayment systems,” he said.

With the introduction of more electronic banking and payment options comes a range of new scenarios that could lead to unauthorised transactions. But being aware of when you may be liable and what you can do to stay protected will make sure you always know about the charges on your card.

Photo source: Shutterstock

Pauline Hatch

Pauline is a personal finance expert at, with 8 years in money, budgeting and property reporting under her belt. Pauline is passionate about seeing Aussies win by making their money – and their credit cards – work smarter, harder and bigger.

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12 comments (showing the latest 10 Q&As)



14 November 2023
What responsibility do apple have if someone has made fraudulent transactions using Apple Pay and my credit card? Surely the thief must have established an Apple Pay account with my credit card details. Why doesn’t apple identify this as my card is linked to my apple account
    Pauline -


    16 November 2023
    Hi Martin, there are a few ways fraudsters can use your personal info that doesn’t necessarily require Apple Pay. That’s definitely one to take up with Apple directly to see what happened and how it can be prevented. In the meantime, your credit card should have insurance that covers fraudulent transactions, so you won’t be out of pocket. Good luck!


14 June 2023
i still in the middle of a long fight with my with exces of 300k stolen/scammed. due to a data breach and my details leaked. phone was hijacked and number ported, as my phone company advised. though the back did not block the account which due to that it was emptied. they also did not pass disputes to correct department for over 5 months, id love to know a little about liability, ill happy provide more detail in an email
    Pauline -


    15 June 2023
    Hi Shaylah, so sorry to hear this has happened to you. How horrible. When it comes to the issue of liability, this depends on who you had the card with and whether the card was Visa or Mastercard. More information and maybe a way to seek help would be to contact the government's cyber security department. There’s detailed guides there and ways to report scams. We hope you get the answers your looking for Shaylah!


12 May 2023
I reported an unauthorised debit on credit card to the issuer in February 2023. I was advised the debit would be pending whilst under investigation. The issuer continues to charge monthly interest of $110 on the amount pending. Can they do this. I suspect the merchant is a scam company and no contact delays are available delaying resolution of the dispute
    Pauline -


    15 May 2023
    Hi Karin, it sounds like it might be time to escalate this with your card issuer. Hope you get it all sorted!
Anthony Edwards

Anthony Edwards

6 October 2022
If a company takes money from my account and it’s been going on for years with me thinking it’s internet or phone bill but when I look up the address it’s page is all about how to get refunded from something I didn’t order! Why wouldn’t this address be on a hot list of fraud?
    Pauline -


    7 October 2022
    Hi Anthony, thanks for the details and feedback. This sounds like a “subscription scam” I strongly suggest reaching out to your card issuer immediately and inform them of this.
Rene Nicola

Rene Nicola

16 November 2021
Can a GP take money from my account for not given them 48 hour notice. I gave them 24 hours.
    Pauline -


    17 November 2021
    Hi Rene, we’re not quite sure what you’re referring to but if there is unauthorised transactions you should definitely call your bank asap.
Annette Bagot

Annette Bagot

7 September 2021
I was recently scammed during which $25000 was taken off my credit card by the online scammers obviously without my consent. Can visa cover this loss.
    Roland B Bleyer - Founder


    8 September 2021
    Hi Annette, sorry to hear about your situation.This will depend on the card you have and the fraud response they have. I would suggest calling the bank directly to check on the coverage of your card. Best of luck with sorting it all out!

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