According to a research conducted by Global Risk Technologies, friendly fraud has been growing 41%, costing over EUR 10 billion in industry losses, compared to around EUR 2 billion lost through ID fraud, as Visa reports.
A vital part of the consumer rights toolkit for credit card customers is chargebacks. These exist to provide reassurance that if goods arrive damaged, not as advertised, or if the merchant ceases trading, the customer can recoup some of the costs directly from the credit card issuer.
However, it is open to misuse by customers with 86% of chargebacks fraudulently placed. Known as ‘friendly fraud’, it occurs when a customer receives their goods or services yet still files a chargeback. The problem is also exacerbated by the existence of banks that offer both issuing and acquiring services.
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