Gary Cardone Outlines How Friendly Fraud is Affecting the Gaming Industry
Friendly fraud is not a new phenomenon, nor is it exclusive to particular industries or payment channels. Illegitimate chargebacks affect everyone.
What is new is the idea that friendly fraud is a needless revenue drain. Merchants are finally realizing there is something that can be done about this formerly unmanageable threat.
Chargebacks911 CEO, Gary Cardone, sat down with David Cook from Gambling Insider. In his interview, Cardone explained the concept of friendly fraud and helped gaming operators recognize their representment rights.
Friendly Fraud: The Universal Threat
Cardone was quick to point out that no industry is immune to chargeback fraud.
Chargebacks911 was launched in 2009. From the very beginning, the company has served a diverse population, assisting clients of all sizes in all industries.
We are yet to find a vertical that doesn’t have a substantial chargeback problem. It is staggering. Every vertical has a problem. It doesn’t matter if the merchant is a digital or physical merchandise provider. Whatever brand, whatever product you have, there is a fraud problem because ecommerce is growing.”
Cardone went on to discuss how this fraud is impacting gaming operators specifically.
How Friendly Fraud Plays Out in the Gaming Industry
Friendly fraud in the gaming industry is triggered by several different things.
- Remorse over gambling debt
- An inability to recognize the merchant’s name on a credit card statement or remember the bet
- An intentional purchase made by an authorized card user (spouse) that the primary cardholder assumes is fraud
Cardone gave the following example. While out of town for business, a husband places a big bet with an online gambling site. The next day, the wife notices the charge and assumes a fraudster has hacked her account. She calls the bank and requests a chargeback for the supposedly unauthorized transaction.
The over-worked, under-paid bank employee fulfils the persistent woman’s request without sufficiently researching the wife’s claim.
The husband authorized the transaction. He participated in the purchase, but the merchant loses big time.
One of the biggest reasons why friendly fraud remains unchallenged by merchants is because they are unable to identify it.
I asked a guy today: ‘How do you define fraud?’ He couldn’t answer my question.”
Merchants need to first determine which chargeback cases are illegitimate because they are 100% disputable. It’s possible to recover lost revenue, but merchants must identify which cases they can fight.
Read More: The Only Way to Determine the REAL Reason Behind the Reason Code
It’s Time to Fight Back
Chargeback fraud has gone unchallenged for far too long. Merchants are needlessly losing revenue.
"I don’t know anyone who wouldn’t defend himself if something was taken from him. Yet, over the last decade, with nearly every vertical in payments, it has been the status quo to not fight chargebacks because they are assumed to be just a cost of doing business”
It’s time to end the myth.
Chargeback fraud is manageable. It is preventable and disputable. With the right tools and expert assistance, merchants can win the war against friendly fraud.
If you’d like assistance from Chargebacks911®, contact us today. We’d be happy to help.
