Friendly Fraud is Online Shoplifting
The idea of online shoplifting may sound a bit farfetched--inconceivable even. But essentially, that’s the most accurate way to define what is now being labeled “friendly fraud.”
A new trend is taking shape among credit card shoppers; consumers are fraudulently filing chargebacks. Shoppers might claim they never received a purchased item or insist the products were low quality. Some even say the purchase was made without the cardholder’s authorization.
While most of these instances occur online, there are people requesting refunds after in store purchases too.
Friendly fraud has increased by 41 percent. Currently, 86 percent of all chargebacks are actually consumer fraud--not identity theft or security breaches.
In fact, profit loses were close to 12 billion dollars in 2012—and those numbers are on the rise.
Merchants will need to recoup their losses somehow. So ultimately, the fees associated with these friendly fraud chargebacks will be passed on to innocent, ethical customers.
Raising Awareness about Friendly Fraud
Friendly fraud is really online shoplifting, but at the end of the day, the biggest victim is the consumer.
Co-Founder and COO
Monica Eaton-Cardone, co-founder of Chargebacks911®, was recently contacted by Chicago's ABC 7 I-Team. Cardone offered her opinions and expertise about friendly fraud.
While Cardone and Chargebacks911® are known for the services they provide to merchants, they also have a warning for consumers.
Credit card companies are beginning to take a stand against cardholders who instigate these fake chargebacks by raising interest rates for repeat offenders.
If credit card companies take a stand against these suspiciously fraudulent cardholders, they can expect damage to their credit report, the inability to shop online and much more.
Providing Assistance to Merchants
Chargebacks911® was founded by fellow merchants who have been through the chargeback trenches. Monica Eaton-Cardone knows exactly what it’s like to be blindsided by these financial upheavals.
If your company is experiencing friendly fraud chargebacks—or any other type of chargebacks—get help right away. The long-term ramifications of unchecked chargebacks can result in termination of your merchant account—and the inability to process credit card transactions.