Avoid Getting Surprised by Unfamiliar Card Transactions

by Arlene Babwah

VP, Risk Management

Member Tips

We realize it can be very frustrating to have charges in your account that you don’t recognize. We know that the only thing that matters to a member experiencing this is identifying the charge or recovering their money.

We’ve recently noticed an uptick in credit and debit card fraud disputes that, upon investigation, turn out to not be fraud. Typically, in this situation, we might hear from a member who sees an unfamiliar transaction on their account and reports it as an unauthorized charge. Our team then works with Visa to confirm its legitimacy.

In a growing number of cases, the merchant has been able to demonstrate that the member actually made the purchase, but didn’t recognize the charge when it came through on their statement. Some examples of where this has happened recently:

  • The member responded to a pop up or social media ad for a free item or free trial of a product. They provided their credit card to cover shipping, but later were charged for the full amount of the product. In the terms and conditions, the merchant indicated that the free trial was for a set period of time, and if the consumer didn’t return the item or cancel the service by a certain date, they would be charged full price for the item or enrolled in a recurring subscription for the product.
  • The member purchased one item online and was presented an offer for an add-on service. They accepted, but later were surprised to find out that the service is a monthly subscription and not just a one-time fee or free add-on.
  • A subset of the above, a member accepted an offer for free shipping with their online order.  Initially, it provided free shipping for the current order and the ability to use the service again in the future. However, the “free” shipping service comes with a monthly reoccurring subscription fee.

When members submit disputes each one is different. In situations like the ones above where the member established a relationship with the merchant, it is not fraud. The member was required to provide their credit card number to enroll. They also agreed to the merchants’ terms and conditions. Unfortunately, we cannot treat situations like these as fraud and are obligated to pay the merchant. Also, Coastal is only able to dispute transactions once, and once they have been resolved, we cannot submit those same transactions again for dispute. The member’s only recourse is to contact the merchant to recover their money.

If services were cancelled or services weren’t delivered as promised, but the member was charged anyway, we always recommend contacting the merchant. This is the easiest way for members to recover their hard earned money (when returning merchandise to the merchant, always request a return shipping label from the merchant to ensure receipt).  If the merchant still has not issued a refund the member, Coastal will initiate the dispute on behalf of the member as long as you can show proof the services were canceled. If the merchant has proof that the member agreed to the terms and conditions, unfortunately, the member will lose the dispute and not recover their money.

In most instances, a member’s best defense is to be vigilant when making online purchases and not be caught by surprise later on.

Tips to Avoid Getting Surprised by Unknown Card Transactions:

  • If you have to enter a credit card number, expect that you may be charged a fee.

  • When signing up for a free trial or service, be sure that the submission form doesn’t have any boxes checked that you don’t agree to.
  • Note that some websites might have check boxes already checked and you may have to actively uncheck them.
  • Be sure to read the terms and conditions for any product or service that you sign up for online before submitting the order.
  • Enroll in alerts to get notified immediately when a transaction happens on your account. It’s usually much easier to identify a transaction as soon as it happens instead of up to a month later when looking at a statement.


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