Sophia became aware of the spending only when she used the card three months later and the purchase was declined because the son’s spending had pushed her close to her credit limit. Some of the transactions were refunded because merchants had not yet dispatched goods, but $5,900 was lost.

Sophia asked her bank to chargeback the remaining transactions, saying her card details had been used fraudulently. Under the credit card provider’s rules, a bank can chargeback transactions which were made fraudulently. The bank declined, arguing it was theft, not fraud, and therefore there were no chargeback rights.

Our investigation

We did not agree with the bank’s position because we considered the friend’s son’s actions in representing himself as the cardholder amounted to fraud. The bank didn’t agree so we conducted an informal survey of other banks. They unanimously said the fraud chargeback reason would apply. In light of this feedback, the bank offered to reimburse the $5,900, which Sophia accepted.

See our quick guide on chargebacks for more information about the process by which bank may be able to recover disputed credit card transactions.