Suggests Impact of Chargebacks Will Surpass $25 Billion Annually by 2020
As one of the world’s foremost experts on transaction disputes, Chargebacks911® COO Monica Eaton-Cardone is an in-demand resource for multiple industry outlets. In her most recent feature, Monica spoke with Jacob Wolinsky of ValueWalk about the “merchant hazard” that is friendly fraud.
The main problem with friendly fraud is that, while it’s hard to identify, it’s even harder to prevent. Considering the current state of the payments industry, it’s no surprise that 60-80% of chargebacks might be friendly fraud. Even worse: successful friendly fraud encourages additional attacks. As Monica points out, “about 40% of consumers who commit friendly fraud will do it again within 60 days.”
It doesn’t have to be this way, though. In the post, Monica puts forth a few suggests as to how we can make the payments industry fair—and sustainable—for everyone involved. What we need is consistent, standards for all parties.
Monica proposes what she calls a “dispute credit score,” allowing schemes to “track consumers who repeatedly commit chargeback abuse and report this behavior back for issuers.” She also suggests we apply the chargeback monitoring program to consumers and issuers, rather than just merchants. “[If] any party’s chargeback ratio exceeds a specified threshold, card schemes can act appropriately,” she says.