Chargebacks911® COO says Friendly Fraud Is Easy to Commit, Hard to Fight
Monica Eaton, Co-Founder and COO of Chargebacks911, spoke with Alina Tugend of CreditCards.com about the pressing chargeback threat, and what merchants can do about it.
CreditCards.com is a widely-read resource for all things credit card-related. Consumers often turn to the site to find the best credit card to suit their needs. However, the site fills many roles, providing information for consumers and businesses alike.
Most chargebacks are cases of friendly fraud, meaning they’re unsubstantiated, frivolous claims. And, as Monica explains, between 60-80% of all chargebacks are probably cases of friendly fraud. Unfortunately for merchants, proving friendly fraud is hard to do.
This costs merchants time and resources, and ultimately impacts their sustainability. “Merchants are responsible for paying a fee for each chargeback, but they are also liable to pay fines and increased fees per chargeback if their merchant account accumulates too many chargebacks,” Monica says.
Even worse, friendly fraud tends to be a self-replicating process. As she elaborates, “We’ve found that 50 percent of customers who commit friendly fraud will do it again within 60 days.”
The process is not hopeless, though, with proper chargeback management.
