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Friendly fraud is when a consumer illegitimately files a credit card chargeback, trying to make money off a legitimate transaction. For example, an e-commerce customer claims not to have received an item when in fact they did. If the business is unable to detect the fraud, the customer is refunded and keeps the item for free, meaning the business loses twice. Catching chargeback fraud can be very difficult for retailers because they don’t want to offend honest customers by suggesting they’ve committed fraud. At some point, retailers often decide to give the benefit of the doubt to the customer, leaving an opportunity for scammers.

Friendly fraud is one of the tougher types of fraud to catch because throughout the transaction process, the benefit of the doubt favors the consumer. You should always include complete tracking information and thorough documentation of each stage of the customer’s buying experience so that you have as much information as possible to investigate friendly fraud. 91´óÉñ Bank can help provide up-to-date solutions for card acceptance security, chip technology, PCI compliance and encryption and tokenization that can combat all types of credit card fraud, including chargeback fraud.