“Friendly Fraud” is a term that gets banded around a lot when talking about online payments. You may have heard it in relation to chargebacks. But what does this oxymoronic phrase mean?
Occasionally referred to as “First Party Fraud”, Friendly Fraud occurs when a customer disputes a payment they made online for goods or services. As opposed to Third Party Fraud, which is when a person uses another person’s payment details to purchase something, Friendly Fraud relates to a charge a customer made using their own payment information.
Buyer’s Remorse – With the cost of living becoming an ever-increasing concern, more and more customers are experiencing guilt or regret with purchases they have made. This can lead them to contact their issuer and recoup their funds.
Confusion – Customers may experience confusion attempting to get a refund directly from the Merchant or be unsure of their order status. This can lead them to bypass the Merchant and contact their issuer directly to receive the funds and cancel their order.
Shared Accounts – People who make payments using shared bank accounts can cause issues. The other people that are named on the account may see the transaction and not be aware of it, causing them to cancel it with their issuer out of fear of it being an illegitimate purchase.
If you’re concerned about any kind of Fraud, we would welcome exploring the options with you – including using tools within the Gateway as well as Third Party systems. Click here for more information.
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