In this case
- A taxi driver in Panama charges Keith Lee $450 for a $10 ride after claiming his credit card didn’t go through.
- Bank of America initially denies Lee’s dispute, arguing that because the card was present and chip-verified, the charge was authorized.
- The case raises questions about whether a “card-present” transaction can be disputed and how to fight back when a bank’s AI gets it wrong.
Read before signing. That’s what Keith Lee will tell you. He recently tried to pay $10 for a cab in Panama City — but ended up getting hit with a $450 charge on his credit card.
Now Bank of America is refusing to help him get a refund of the charges on his Visa card. The reason? It said he read — or should have read — the point-of-sale terminal in his cab before he left and therefore agreed to the charges. Since his card was present during the transaction and he signed off on it, there’s nothing the bank can do.
Or is there?
Actually, before getting to the details of this case, let’s head right over to the rules. You can find them in a lengthy document called Dispute Management Guidelines for Visa Merchants. Under “fraudulent card-present transaction” it notes that even with an authorization approval, the transaction can be disputed and sent back to you if it turns out to be fraudulent.
And that’s why you’re reading about Lee’s case today.
Lee’s case raises several questions. Can you dispute a charge if you handed over your card? What should you do if your bank refuses to help? And how can you protect yourself from scams like the one Lee encountered?
Let’s find out.
“I knew right away it was fraud”
Lee thought he was doing everything right when he got into a cab in Panama City. He used his Bank of America travel rewards Visa card, which comes with a zero liability guarantee and numerous fraud protection features. And, of course, there were the rewards he would get from using plastic to pay.
“The taxi driver said my card didn’t go through,” Lee recalls. “So I paid him $10 in cash. Then my wife got an alert about a $450 charge. I knew right away it was fraud.”
Lee immediately reported the charge to Bank of America as fraudulent. You can do that almost instantly through the Bank of America app.
It didn’t take long for B of A to deny the dispute.
The reason? The transaction was chip-verified, and Lee had “authorized” the charge by handing over his card. Case closed.
But that wasn’t the only reason Bank of America sided with the scammy merchant. The bank asked him for a paper receipt for the cab ride.
“I do not have a receipt for the $10 cash payment,” says Lee. “When the taxi driver informed me that my credit card was not processing, I paid the fare in cash. Unfortunately, I was not issued a receipt at that time.”
He says he did everything he could once he discovered the problem, which was pretty much immediately.
“I called immediately upon noticing the charge to report it as unauthorized,” he said in a letter to Bank of America. “I take great care in monitoring my account and do not make a habit of disputing charges. This situation is an exception, as the charge is clearly not legitimate.
Lee had two strikes against him — no receipt for the taxi ride and a “card present” transaction. Was he really going to lose $450?
Have you ever been overcharged by a taxi driver or other merchant while traveling? How did you handle it?
Bank of America’s AI initially sided with the merchant. Are banks relying too much on automated systems and not enough on common sense?
What’s your number one rule for using a credit card safely in a foreign country? Share your best tip in the comments.
What if your bank refuses to help you?
Unfortunately, banks are using artificial intelligence to process many claims like the one Lee had. That means no human is reviewing the case for obvious problems (and believe me, the problems with this one were obvious). One of the issues with AI is that it thinks in a linear way and is unable to connect several issues, such as Visa’s guidance for disputes and the problems with the merchant claiming the card didn’t go through. The shady cab driver had coded his purchase under the “software” category. So Bank of America’s AI said: The card was there, therefore the charge is valid.
But who buys $450 worth of software from a Panamanian cab driver? That’s a huge red flag.
The trick here is to get your case in front of a person who can make the right call. And that means escalating your case. Every dispute department has an appeals process, as I explain in my guide to credit card disputes. Contact the bank’s executive office or customer relations team. Here are the Bank of America executive contracts.
You can also file a formal complaint with the Consumer Financial Protection Bureau (CFPB). Banks are required to respond to CFPB complaints, and this often speeds up the resolution process.
And if none of those work, you can always contact my advocacy team. We are always happy to help. Sometimes, a little publicity is all it takes to get a company’s attention.
Can you dispute a charge even if you handed over your card?
The short answer? Yes. But it’s complicated.
Credit card companies often deny disputes for “card-present” transactions, especially if the card is chip-verified. Banks argue that if you handed over your card, you authorized the charge — even if the amount is incorrect.
But there’s more to the story. Under Visa’s dispute management guidelines, merchants are required to provide proof of authorization, including a signed receipt or other documentation. If they can’t, the charge might be reversed.
In Lee’s case, the taxi driver processed the $450 charge under a suspicious merchant category (“software vendor”) and didn’t provide a signed receipt. That should’ve been enough to reverse the charge. But Bank of America didn’t see it that way — at least not at first.
How can you protect yourself from scams like this?
Credit card fraud like this is all too common, especially in tourist-heavy areas. Here’s a decimal point case that had one of our readers paying $2,500 for lunch. Here’s another reader who got a $7,853 credit card bill after visiting a bar.
How do you protect yourself?
- Steer clear of taxis. I’ve run into all kinds of scammy behavior by taxi drivers. The best way to avoid it is to avoid local cabs. Try a ride-hailing service like Lyft or Uber instead.
- Always get a receipt. If you pay in cash, ask for a receipt. It may seem unnecessary, but it could save you from a dispute later.
- Monitor your checking account. Ask your bank to send you a text message whenever there’s a transaction. Lee could have received a confirmation by text message — and confronted the cab driver — before he got out of the cab.
And most important of all, make sure you check the payment terminal and note the amount you’re being charged before you swipe your card. Read before signing!
Can our advocacy team get this charge reversed?
This case was a slam dunk. Lee had contacted Bank of America within minutes to report the inaccurate charge. He had provided ample evidence of the scam. What’s more, he’d been a Bank of America customer for more than 30 years.
I contacted the bank on his behalf. Shortly after that, Lee contacted my team with some good news.
“We got our money back from Bank of America,” he reported. “The escalation employee even told us the scams from taxi drivers are well known, and even a woman I told at our local branch said the same. I’m sure without your website and assistance I would just have been made to pay for that fraudulent charge.”
How to avoid the taxi trap
A simple scam can turn a $10 ride into a $450 nightmare. Here are four ways to protect yourself from credit card fraud when you travel.
1. Read before you sign
Always check the amount on the payment terminal before you insert your card or sign. This is the single most important step to prevent “decimal point” scams.
2. Ditch the local taxi
Scams are common in tourist-heavy areas. Using a ride-hailing service like Uber or Lyft provides a digital record and a fixed price, reducing your risk.
3. Always ask for a receipt
Even if you pay in cash, a receipt is crucial. It’s your only proof of payment and can be essential for winning a dispute if something goes wrong.
4. Turn on transaction alerts
Set up your bank app to send you a text for every transaction. This gives you instant notification of a fraudulent charge, allowing you to address it immediately.
FAQs
- Can I dispute a charge even if I handed my card to the merchant? Yes. While banks often deny initial disputes for “card-present” transactions, you can still win. Under Visa’s rules, a transaction can be disputed as fraudulent even with an authorization. The merchant must provide proof of authorization, like a signed receipt for the correct amount.
- What should I do if my bank’s automated system denies my dispute? Escalate your case to a human. Contact the bank’s executive office or customer relations team. You can also file a formal complaint with the Consumer Financial Protection Bureau (CFPB), which requires the bank to respond.
- Why would my bank side with a scammer? Automated systems often use simple logic. If the card’s chip was verified, the AI may automatically assume the charge is valid. It often fails to recognize red flags, like a taxi driver charging for “software,” which requires a human review to catch.
- What is the most important way to protect myself from this type of scam? Read before you sign or tap. Always check the amount displayed on the payment terminal to ensure it’s correct before you authorize the transaction. This is your first and best line of defense.
