How To Handle Unauthorized Charges on Your Digital Wallet

A digital wallet is a convenient way to pay for goods and services without carrying cash, credit cards, or other physical cards. Unfortunately, hackers can access your online payment information to steal from your digital account. Understanding how scammers try to access your digital payment methods can help you protect your digital wallet.

If you have questions about handling unauthorized charges on your digital wallet, talk to a consumer protection lawyer.

Understanding Your Digital Wallet Protections

A digital wallet is an online service, program, app, or device that allows cardholders to make transactions without a physical card or payment method. Most people use digital wallets to make and receive online payments, but they can also hold tickets, insurance cards, or identity cards. Digital wallets contain sensitive information, including credit card numbers and bank account information.

The most common digital wallets people use are on their mobile phones. These include Google Pay, Apple Pay, and Samsung Pay. Cash App, Paypal, and Zelle are other common digital payment systems.

Apps and phones come with built-in digital protections. Digital wallet programs have security measures and encryption to limit unauthorized access. Users can also include their own security protections to protect card details. Additional security measures include biometric authentication, multi-factor authentication, and strong passwords.

State and federal consumer protection laws also protect users against fraudulent transactions. Federal laws include the Electronic Fund Transfer Act (EFTA) and the Fair Credit Billing Act (FCBA), which give consumers legal protections and rights when making electronic payments. Cardholders have limited liability for and can dispute unauthorized transactions.

Unauthorized Charges on Your Digital Wallet

Fraudsters can access your mobile wallet through phishing scams, malware, or public Wi-Fi. With your stolen credit card numbers, scammers can make unauthorized purchases on your account. Scammers can also get your sensitive data to commit identity theft.

Scammers can get ahold of your e-wallet app information in different ways. Some of the most common scams involve impersonating someone to get you to give out your payment app information. These impersonation scams include:

• Claiming to be from law enforcement and threatening arrest unless you make a payment
• Credit card reporting fraud detection needs you to click on a link to log on to your account
• Emails with malware attachments that can take over your phone
• IRS or government agency requiring immediate payment
• Fake giveaways and sweepstakes requiring a handling fee or administrative fee
• Advance fee fraud, adding money to your account and asking you to repay part of the overpayment

Securing Your Digital Wallet

Anyone who can get access to your mobile phone or digital wallet apps can make fraudulent payments. Make sure you secure your phone and digital wallet payment accounts. Strong security measures can reduce the risk of unauthorized access. Ways to secure your digital wallet include:

• Use strong passwords and change your password regularly
• Never click on a link or download an attachment in an unsolicited message
• For any security breaches, contact your account directly through their official website
• Banks and credit card companies won’t ask for your password or sensitive information in an email or on the phone
• Beware of someone requiring payment with a digital wallet, cryptocurrency, or through gift cards
• Use two-factor authentication (or multi-factor) for your phone and digital wallet
• Monitor your credit report for suspicious activity
• Turn off near-field communication (NFC) when not in use
• Use secure internet connections or virtual private networks (VPNs) when making online payments

Reporting Unauthorized Transactions

If you notice digital wallet fraud, immediately report it to your bank, credit card, or digital platform. They may be able to stop payment or do a chargeback for unauthorized charges. However, getting your money back from the payment apps may be too late.

The EFTA and FCBA limit your liability for unauthorized purchases. Generally, you aren’t responsible for credit card fraud over $50 after reporting a stolen card. This typically applies to credit card accounts like Visa, American Express, and Mastercard.

If someone makes unauthorized credit card purchases, you must report it to the credit card company within 60 days. Your creditor must acknowledge charge disputes within 30 days and investigate the charges. They have to notify you of the results of their investigation.

You can freeze your credit report with the major credit bureaus. A credit freeze will stop anyone from opening new accounts under your name. Monitor your credit report for any other payment fraud.

Report digital wallet fraud to the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC).

For legal advice about unauthorized digital wallet payments, contact a consumer protection lawyer.