Friendly fraud is when a consumer illegitimately files a credit card chargeback, trying to make money off a legitimate transaction. A common example scenario would be an e-commerce customer claiming not to have received an item when in fact they did. If the fraud goes undetected, the criminal is refunded and gets the item for free. The business loses twice.
Friendly fraud can be difficult for retailers to catch. And in trying to investigate this type of fraud, businesses want to be careful not to offend honest customers who have legitimate complaints. E-commerce shipments should always include complete tracking information for best protection.
M&T Bank Merchant Services can help provide up-to-date solutions for card acceptance security, chip technology, PCI compliance, encryption and tokenization that can combat all types of credit card fraud, including friendly fraud.