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How Everyone Got It Wrong About Facebook’s Friendly Fraud Problem

How Everyone Got It Wrong About Facebook’s Friendly Fraud Problem

Chargebacks911® COO Weighs in on Friendly Fraud Situation for CustomerThink

Monica Eaton-Cardone of Chargebacks911 is perhaps the world’s leading expert on the subject of chargebacks and friendly fraud. In a new guest feature for CustomerThink, she applies her insight to complaints made against social media giant Facebook regarding chargebacks, and how those claims may not be justified.

CustomerThink is “the world's largest online community dedicated to customer-centric business strategy.” Their global community of business leaders serves 3.5 million visitors per year, from over 200 countries around the world, all of whom strive to build more profitable, customer-centric enterprises.

Back in 2019, allegations were made against Facebook based on an internal memo circulated in the company titled Friendly Fraud – what it is, why it’s challenging, and why you shouldn’t try to block it. This memo was misinterpreted and used as evidence that Facebook was trying to scam users out of money. As Monica explains, though, that doesn’t reflect the reality of the situation.

“Facebook’s actions didn’t reflect the kind of malicious intent, everyone, pointing to,” she explains. “In fact…Facebook and the game developers on their platform are the victims of friendly fraud, not the perpetrators. Their actions reflect a calculated decision process every business in the digital space makes.”

Every business who accepts card-not-present charges must balance customer authentication against the desire to provide a smooth customer experience with at little friction as possible. Facebook opted to prioritize the latter over the former, anticipating that it would ultimately provide a net-better experience.

“The memo shows that Facebook decided to error on the side of convenience. They advised developers to make their checkout process nearly frictionless in hopes that the sheer number of purchases would outbalance the increased chargebacks.”