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86% of fraud in chargebacks

86% of fraud in chargebacks

Global Risk Technologies (GRT) recently examined friendly fraud, and found approximately 86% of chargebacks are fraudulent, and many consumers bypass merchants to directly file complaints with card-issuing banks.

GRT CIO Monica Eaton-Cardone describes the practice as a learned behaviour, and

Organised retail Crime

Retailers failing to protect themselves against fraud and cybercrime

says most consumers do not intentionally attempt to get something for free the first time they initiate a dispute with card issuer.

However, following a relatively easy chargeback experience, many consumers become serial offenders, and file new complaints in fewer than 90 days after their first successful chargeback. Verifi’s Tony Wootton says as consumers become more familiar with going online to look at credit card activity, they can dispute a charge in real time, sometimes before they even receive their statements.

He also says unrecognisable descriptors are a leading cause of cardholder initiated inquiries. Subscription merchants have a disproportionately higher percentage of chargebacks than all other categories in Verifi’s merchant base.

GRT’s survey found merchants need to maintain receipts and clearly state refund and cancellation policies, ensure customers can reach out with inquiries, look for patterns, and maintain real-time monitoring of payment activity.

The post 86% of fraud in chargebacks appeared first on Payments Cards & Mobile.

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