If the first image that comes to mind when you think of a credit card fraudster is a figure behind a computer lurking in the shadows, it’s time to meet the other faces of fraud. Because “true fraud” (or fraud stemming from stolen credit cards) isn’t the only type of fraud costing your company serious revenue.
In this video, the husband is committing friendly fraud. Friendly fraud is when a cardholder mistakenly disputes a purchase because they think they did not authorize the purchase. Friendly fraud can stem from an unclear merchant descriptor, simple forgetfulness, or in the case of the video a family member making unknown purchases. Even though the husband disputing the purchase did not have malicious intentions behind the dispute, he still initiated a chargeback against the merchant.
By recognizing every type of fraud, merchants are prepared to rectify profitable customer relationships and terminate risky ones. Without the distinction, you’re putting potentially valuable customer relationships in danger. Learn more about the three types of payment fraud and how to prevent them in The Three Faces of Fraud eBook.