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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
Most fraud disputes end quietly when the issuer credits the account and mails a new card. This one took a different turn after the new card arrived. A card issuer is facing claims in Kansas federal court that it violated the Fair Credit Billing Act, the Truth in Lending Act, and the Fair Credit Reporting Act, along with state law, for allegedly reversing provisional credits it had issued on roughly $13,300 in disputed online gambling charges and then continuing to report the balance after telling the plaintiff in writing she was not responsible for it.
The background: The plaintiff’s credit card account was allegedly taken over in late August 2025 and used over the course of about a month to fund online gambling platforms operating under merchant names like “Sorcery Reels,” according to the complaint.
- The charges started at $5.00 and escalated to multiple $500 charges per day. The same merchants allegedly hit the plaintiff’s accounts at four other financial institutions, one of which refunded everything within seven days, according to the complaint. The defendant’s response to the spending pattern was allegedly to raise the plaintiff’s credit limit.
- After the plaintiff reported the fraud, the defendant provisionally credited all of the charges on September 29, 2025, closed the account number, and issued a new card.
- In letters dated October 15, 2025, the defendant reversed the credits, citing information from the merchant. That information, according to the complaint, consisted of a form statement riddled with misspellings, “Know Your Customer” data with no street address, city, or state and an incorrect zip code, and IP data listing the user’s city as “unknown.”
- The plaintiff sent a detailed dispute letter in November with a police report and internet crime report, and a 50-page letter in January 2026. The defendant allegedly responded with a series of short form letters stating the dispute had already been investigated and resolved. A December 30 letter responding to a CFPB complaint asserted the plaintiff had verified the charges, done prior business with the merchants, and added the card to an eWallet, all of which the plaintiff denies.
- The plaintiff then disputed through the credit reporting agencies in March 2026 with identity theft documentation. The defendant sent a letter dated April 3, 2026 stating it had determined she was not responsible for the balance and had requested the tradeline be deleted.
The claims: The complaint brings six counts against the defendant.
- The defendant is accused of violating Section 1666 of the FCBA by failing to reasonably investigate the billing error disputes, reversing provisional credits without adequate written explanation, and re-billing the disputed charges, along with Section 1666a for assessing finance charges on disputed amounts.
- The defendant is accused of violating Section 1643 of TILA by holding the plaintiff liable for unauthorized use in excess of $50.
- The defendant is accused of violating Section 1681s-2(b) of the FCRA by failing to reasonably investigate the indirect disputes and failing to block the identity theft information from reporting, with the complaint also invoking the furnisher’s duty under Section 1681s-2(a)(6)(B).
- The complaint also alleges deceptive and unconscionable practices under the Kansas Consumer Protection Act, negligence, and seeks punitive damages under Kansas law.
