Yes, you can sue a company for unauthorized charges, and in most cases you can do it without a lawyer in small claims court. Federal laws like the Fair Credit Billing Act and the Electronic Fund Transfer Act give you the right to recover your money and, in some cases, statutory damages and attorney’s fees when a company or its bank breaks the rules. But suing is rarely the first step. Courts expect you to try the dispute process first, and both the dispute and the lawsuit run on strict deadlines.
Dispute the Charge Before You Sue
A formal dispute with your bank or card issuer is usually the fastest way to get your money back, and it’s the step courts expect you to take before filing suit. The rules depend on whether the charge hit a credit card or a bank account.
Credit Card Charges
The Fair Credit Billing Act caps your liability for unauthorized credit card use at $50, and most card networks waive even that.1Cornell Law School / LII. Fair Credit Billing Act (FCBA) To trigger the FCBA, send a written dispute to your card issuer within 60 days of the statement that shows the charge. Include your name and account number, identify the charge, and explain why you’re disputing it.2Office of the Law Revision Counsel. 15 U.S. Code 1666 – Correction of Billing Errors While the issuer investigates, it cannot try to collect the disputed amount or report it as delinquent.
Debit Card and Bank Account Charges
The Electronic Fund Transfer Act covers debit card transactions, ATM withdrawals, and electronic transfers.3Cornell Law School Legal Information Institute (LII). Electronic Funds Transfer Act The liability rules are harsher than for credit cards. Report a lost or stolen card within two business days, and your liability is capped at $50. Wait longer but report within 60 days of your statement, and it jumps to $500. Miss 60 days entirely, and you can be liable for the full amount of every unauthorized transfer after that point.4Office of the Law Revision Counsel. 15 U.S. Code 1693g – Consumer Liability This is where most people get hurt. They don’t check statements often, and by the time they notice, the clock has run out.
When Suing Becomes the Right Move
If your bank sides with the merchant, or the company keeps charging you anyway, a lawsuit is a real option. To win, you generally need to show three things: the charges were unauthorized, you suffered actual financial harm, and you took reasonable steps to resolve the problem first.
Proof that you never consented is the foundation. That might mean showing you never signed up for the service, that a company kept billing after you cancelled, or that a merchant you’ve never done business with charged your account. You’ll also want to show you tried the available channels first: contacting the company, filing a chargeback, or complaining to a regulator.
You don’t have to prove the company acted maliciously. Under both the FCBA and the EFTA, a company that fails to follow the statutory procedures is liable whether or not the noncompliance was intentional.
Check Your Contract for an Arbitration Clause
Before drafting anything, pull up whatever terms of service or account agreement you accepted. Many consumer contracts include mandatory arbitration clauses that force disputes into private arbitration instead of court, and many also include class action waivers.
One exception matters here: a lot of arbitration clauses carve out small claims court. If your charges fall within your local small claims dollar limit, you may still be able to sue there. Read the clause carefully. Some contracts also give you an opt-out window, typically 30 to 60 days after signup, during which you can reject arbitration entirely.
Build Your Evidence
Documentation is what separates claims that get paid from claims that get dismissed. Start collecting as soon as you notice the problem.
- Bank and credit card statements showing the disputed charges, with dates, amounts, and merchant names.
- Emails, chat transcripts, letters, and notes from calls with the company, including dates, representative names, and what was said.
- Cancellation proof: confirmation emails, screenshots of cancellation requests, or records showing you tried to end the service before the charges appeared.
- Chargeback records from your bank showing the dispute, the outcome, and any provisional credits.
- The contract or terms of service in effect when the charges occurred. If the company changed its terms, keep copies of both versions.
For recurring charges, evidence that you never gave informed consent carries extra weight. The Restore Online Shoppers’ Confidence Act requires online sellers to clearly disclose material terms, get your express informed consent before charging you, and provide a simple way to cancel.5Federal Trade Commission. Restore Online Shoppers’ Confidence Act If a company buried the terms in fine print or made cancellation deliberately difficult, that helps your case.
Where to File
For most unauthorized charge disputes, small claims court is the practical choice. Filing fees are modest, typically from around $10 to a few hundred dollars depending on jurisdiction and claim size. You don’t need a lawyer, procedures are simplified, and cases usually resolve within weeks or a couple of months.
Every state sets its own small claims dollar limit, and they vary widely. If your charges exceed your state’s cap, you’ll need to file in a higher civil court, where the process is more formal and hiring an attorney becomes more practical.
Before filing, send the company a written demand letter stating the amount you want and giving a deadline to pay. Courts expect a good-faith attempt to resolve things, and a clear demand letter sometimes prompts a settlement before a hearing.
When you file, you’ll need to serve the company with court papers. For a corporation, that means serving its registered agent, which you can usually find through your state’s secretary of state business search. Process servers handle this for a fee, and some jurisdictions also allow service by certified mail.
What You Can Recover
The damages available depend on which law the company broke and how badly it behaved.
Statutory Damages Under the EFTA
If a company violates the EFTA, you can recover your actual losses plus statutory damages between $100 and $1,000 per individual action, even if your actual losses are small. The court can also award attorney’s fees and costs.6Office of the Law Revision Counsel. 15 U.S. Code 1693m – Civil Liability
FCBA Creditor Penalties
When a credit card issuer fails to follow the FCBA’s investigation requirements, it forfeits the right to collect the disputed amount, up to a $50 cap.2Office of the Law Revision Counsel. 15 U.S. Code 1666 – Correction of Billing Errors That forfeiture is separate from any actual damages. The broader Truth in Lending Act, under which the FCBA sits, also provides for statutory damages and attorney’s fees in certain cases.
Injunctive Relief
A court can order the company to stop the billing practice. This matters most where a company has a pattern of unauthorized charges affecting many consumers. If it routinely adds hidden fees or makes cancellation nearly impossible, the court can require it to change those practices going forward.
Punitive Damages
Where a company acted intentionally or recklessly, courts can award punitive damages on top of actual losses. Think of a company that knowingly charged customers for services they never authorized and then stonewalled refund requests. Punitive damages require a higher standard of proof and aren’t awarded routinely, but they’re available when the facts warrant it.
How Long You Have to Sue
Both the FCBA and the EFTA impose a one-year statute of limitations on private lawsuits, running from the date the violation occurred.6Office of the Law Revision Counsel. 15 U.S. Code 1693m – Civil Liability The clock starts when the unauthorized charge hits your account, not when you discover it. State consumer protection claims may allow longer, but waiting rarely helps. Evidence fades, witnesses forget, and the further you are from the original charge, the harder it is to convince a court you took the problem seriously.
Don’t confuse the dispute deadlines with the lawsuit deadline. You have 60 days from your statement to dispute the charge with your bank or issuer, but up to a year to file suit. Use the dispute process first, and if it doesn’t fix things, file well before the one-year mark.
Subscription Traps and Recurring Charges
Recurring subscription charges are one of the most common sources of unauthorized billing complaints. ROSCA governs online sellers using a negative option feature, where you’re charged unless you take action to cancel. The seller has to clearly disclose the terms, get your express consent, and provide a simple cancellation method.5Federal Trade Commission. Restore Online Shoppers’ Confidence Act
If a company charged you for a subscription you didn’t knowingly agree to, or made cancellation unreasonably hard, those facts support both a chargeback and a lawsuit. Screenshot the cancellation process, save error messages, and document every step you took to stop the charges. Several states have also passed their own cancellation laws that go beyond federal requirements.
State Consumer Protection Laws Often Do More
Federal law sets the floor. State unfair and deceptive practices statutes often offer stronger remedies. Roughly half of all states allow courts to award double or triple damages for deceptive business practices, and most allow recovery of attorney’s fees if you win. Those fee-shifting provisions matter because they make it financially viable for attorneys to take smaller cases on contingency.
State laws also tend to define “deceptive practices” more broadly than federal statutes, which can cover billing practices that don’t fit neatly into the FCBA or EFTA. If a company charged you for a service it never provided, misrepresented what it was charging you for, or changed pricing without adequate notice, your state statute may give you a more direct path to recovery than federal law.
Because these statutes vary significantly, check your state attorney general’s website or talk with a consumer protection attorney to see what’s available where you live.