I have two questions regarding the dispute request of an unauthorized (fraudulent) transaction. If the answer depends on whether the card is credit or debit then kindly tell me.

First question: The banker told me it is possible to do a dispute even if the card is not active anymore. So a dispute could be done on an already cancelled (reported as lost or stolen) card. How is this possible? As far as I am aware, a card that was cancelled (closed) cannot be used anymore. A dispute is still understood as "usage" so I am wondering how is it possible to dispute a transaction on an already cancelled card?

Second question: The card is obviously attached to the bank account. If the bank account was closed by account holder, can a transaction on the card still be disputed? Obviously I am referring to the card linked to already closed bank account.


  • 3
    Are you sure that the banker isn't referring to transactions before the card was cancelled? Lets say it was stolen and you didn't notice for 24 hours. The thief was able to spend $1000 and you cancelled the card as soon as you noticed. You'd still be liable for those charges if you didn't dispute them, even though the card is cancelled...
    – Ron Beyer
    Sep 4 '19 at 15:37
  • 3
    Are you asking about a credit or debit card?
    – RonJohn
    Sep 4 '19 at 15:37
  • 3
    Ah, well avoiding chargebacks as a business is kind of a different question than what you asked. There are lots of resources on best practices to avoid excessive chargebacks, but you can't accept credit cards and avoid all chargebacks.
    – Hart CO
    Sep 4 '19 at 16:59
  • 6
    The way to have zero chargebacks is to not accept credit cards.
    – Hart CO
    Sep 4 '19 at 18:42
  • 4
    Seems to me (as a non-business owner) that the most obvious way to avoid chargebacks, while still accepting cards, is firstly to not screw over your customers (advertise honestly, avoid hidden fees, etc), and secondly keep a trail of documentation for your bank to show that every transaction you process is legitimate and that chargebacks are not justified. For anything else you should have some form of insurance.
    – brhans
    Sep 4 '19 at 18:58

Here's a reasonable example of how an unauthorized charge could be disputed on a cancelled card:

Monday, my card is used fraudulently, Tuesday I cancel my card. I'm old-fashioned so I don't check online, I just get my paper statement mailed each month. So about a month later I get my statement and see the fraudulent charge. I immediately call to dispute it. They do their thing, and either adjust my final balance due or refund me money via check if I have overpaid due to the fraudulent charge.

Disputes are about previously processed transactions, not about new transactions. You wouldn't expect any new transactions after the card is cancelled, but you do still have the right to contest unauthorized transactions even after you cancel your card.

The bit about a linked account in the question suggests a debit card rather than credit card, but in general the fraud protection is the same, the main difference is that fraudulent charges on your debit card can leave your funds tied up while the dispute is being investigated/resolved and there are some scenarios where you'd not get a full amount back depending on the timeliness of your dispute.

In comments you've asked how to block a dispute, why would you want to prevent fraudulent charges from being disputed? I can think of no valid reason why you'd want these protections to be eliminated.

Edit: From additional comments it's clear you're asking from a business perspective and want to know how to avoid chargebacks. There are best practices to minimize the number of chargebacks, but the only way to avoid them all is to not accept credit cards.


Banker told me it is possible to do dispute even if the card is not active anymore. So dispute could be done on already cancelled (reported as lost or stolen) card. How is this possible? As far as I am aware of, card that was cancelled (closed) cannot be used anymore. Dispute is still understood as "usage" so I am wondering how is possible to do dispute on already cancelled card?

A cancelled card means it cannot be used to make new purchases, it doesn't mean that you aren't responsible for the purchases before it was cancelled. Cancelling a card doesn't "clear the plate" of anything it was used for.

So take the scenario that your card was stolen at a bar just before you left. You went directly home and went to bed. You wake up in the morning, do things around the house, and in the afternoon head out. You notice now that your card is not where it is. You spend a few hours looking for it and then determine to report it lost/stolen.

In the 12+ hours your card was missing, the thief used it for numerous transactions. How can the bank know that those transactions are fraudulent, and the ones at the bar are legitimate? You have to dispute them. Otherwise the bank assumes all charges are legitimate up until you cancel it. Any charge after you cancel it (which is possible for a short time until the payment processing system updates) will (usually) automatically be discharged.

So the only thing you can do is to dispute a charge after the card is cancelled. You are otherwise still responsible for any charges on that card. Otherwise you could pull a scam, get a card, charge it up, and then cancel it. Cancelling a card does not remove your liability to pay the debt incurred.

Second question: The card is obviously attached to the bank account. If the bank account was closed by account holder, can be dispute of card unauthorized transaction still requested? Obviously I am referring to the card linked to already closed bank account.

This would only be "obvious" in the case of a debit card. Credit cards are not always linked to bank accounts. Again if you spend more than you have, this is the bank providing you credit. You are liable to pay that back, even if the account is closed. You can't expect to borrow a bunch of money from the bank, close the account, and not be responsible for the difference. When you close the account, it doesn't mean the bank "forgets you exist", if you had a fraudulent transaction and report that within a reasonable time, they will investigate it, even on a closed account.

  • Ron Beyer those are bad news then since you are saying in both situations (cancelling the card, closing bank account) dispute can be still requested. What needs to be done so the dispute request is blocked? Meaning that dispute cannot be requested anymore.
    – Cristian
    Sep 4 '19 at 16:00
  • Probably wait an "unreasonable" amount of time, like 2 billing cycles, but what constitutes unreasonable time will vary by card, and is probably spelled out clearly in the terms you accept when you open the card.
    – Ron Beyer
    Sep 4 '19 at 16:09
  • and just to add, when you say "responsible for purchases made before the card was cancelled", some card issuers consider this to hold true for recurring purchases made before the card was cancelled. if you close the account it may be different, but i had a card where I basically turned off the ability for it to be used (not quite cancelled) and still got charges on it, and the issuer explained that recurring charges have a flag that lets them bypass such restrictions.
    – user12515
    Sep 5 '19 at 22:50

If card( or the bank account or both are not active) is not active at the time the disputed transaction is made, then the charge should not go through even in the first place. The issues is with the banking software.

I had a similar issue ( with credit card) where a authorized charge occurred on a date suppose march 03, 2012, the merchant was a day care provider ( and was a sport complex also), I did not signed up for any re-occurring charges. The credit card was regularly paid and the expiration date on the card was about November 2012. And then they gave me a new card ( with a new number also as they had some other issues of their[bank] own.)

The merchant re-registered my child in 2013 ( without me, my spouse's permission) also and I saw that charge on my credit in April 2013. I called bank and they said don't worry as it is on a "not valid card" and our system had a problem. But again after what ever they( Bank did) , they said it is valid charge and I will need to file a police report. So before police report, I contacted the merchant, the merchant accepted his fault and said they never received any communication from the credit card company about the dispute. Then the merchant refunded the money.

But to emphasis the point that Banks never accepts their mistakes. I have even seen banks withdrawing money for same check twice ...

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