If a teenager uses a parent's credit card without permission, can the charges be disputed?

Yes, charges made by a teenager using a parent’s credit card without permission can be disputed, because a case for unauthorized use could be made. The law defines unauthorized use as a credit card transaction by someone who does not have actual, implied, or apparent authority to use the card. The cardholder can’t benefit from the use, either. A teenage child using a parent’s credit card without permission would fit that description on some counts, but a case could be made that the teenager has implied or apparent authority from the cardholder. And technically, a parent could potentially benefit from a teenager using their credit card. The teenager might buy something the parent enjoys or needs, or the parent could receive rewards from the purchases. There are a few other things to keep in mind about the legal implications of reporting a teenager’s unauthorized credit card use.

Here’s what you need to know about unauthorized teenage credit card charges:

• Unauthorized charges made by anyone, including teenagers or family members can be disputed.
• The law defines unauthorized use as a credit card transaction made by a person, other than the cardholder, who does not have actual, implied, or apparent authority for such use, and from which the cardholder receives no benefit.
• Federal law also states that cardholders cannot be liable for more than $50 in unauthorized credit card charges. But issuers extend this all the way to a $0 liability guarantee.
• In some cases, the card issuer may ask for a police report number in order to investigate an alleged unauthorized charge. This can make things difficult when family members are responsible for unauthorized charges.

There is some legal precedent for parents disputing their kids’ unauthorized credit card charges. In these cases, liability got pinned on the merchant, and there were many steps involved for the parents to get their money back. In 2014, Apple famously settled a Federal Trade Commission complaint that arose from the company holding parents liable for their kids’ in-app purchases. Apple settled for $32.5 million, and entitled the parents to full refunds of their kids’ purchases—at least one of which totaled $2,600 in charges made by a child in the Tap Pet Hotel game. A similar situation happened in January 2019 to a North Carolina mother when her child charged $1,200 to her credit card for in-game purchases on Fortnite. Her case was taken to the state level before the game’s creator, Epic, refunded her money.

If you’ve incurred fraudulent charges due to your teenager using your card without your permission, the FTC is on your side. You should file a complaint with them if you report the charges as fraudulent to a credit card company and they don’t agree. In a statement after the Apple settlement, FTC Chairwoman Edith Ramirez reminded that federal law is clear on this topic: “You cannot charge consumers for purchases they did not authorize.”