113:
security codes can show that the cardholder (or, in the case of the three-digit security codes written on the backs of U.S. credit cards, someone with physical possession of the card or at least knowledge of the number and the code) was present, but even the entry of a security code at purchase does not by itself prove that delivery was made, especially for online or via-telephone purchases where shipping occurs after finalization of the contract. Proof of delivery is often difficult, and when it cannot be provided, the cardholder gets the product without paying for it.
985:
70:
replaced domestic bank transfer schemes throughout Europe. Adding to the issue is that some receiving banks have handled SEPA SCT Recall requests without due care and are reverting payments without consulting the payee. This has allowed some payers to fraudulently recall bank transfers after having received goods or services from the payee.
125:
Another common channel for chargebacks is mail order/telephone order (MOTO) payment processing through a call center. In this case, as with the two others listed here, the main problem is that this is a card not present transaction. To help eliminate call center purchase chargebacks, call centers are
83:
Online merchants who sell physical products cannot fully protect themselves. The only way to have concrete protection is to take an imprint of the card (and even with card readers/makers this can easily be duped), along with photo ID. That signature, in addition to information gathered online, can
180:
methods, including mobile apps, and the increasing sophistication of the fraudulent actors, including bots, have made the task of detecting and preventing charge back fraud, particularly online, more complex. According to a 2018 Gartner report on online fraud, retailers are increasingly turning to
159:
Regardless of the outcome of the chargeback, merchants generally pay a chargeback fee which typically ranges anywhere from $ 20 to $ 100. A 2016 study by LexisNexis stated that chargeback fraud costs merchants $ 2.40 for every $ 1 lost. This is because of product-loss, banking fines, penalties and
129:
When consumers walk into a store and buy something, they typically swipe their credit cards, confirm the purchase amount, enter a secret code (or sign their name) and leave with the merchandise. This is a card present purchase and fraudulent chargebacks in these situations are almost non-existent.
69:
as opposed to credit card payments, has been documented in Europe. SEPA credit transfers can be recalled within ten working days of settlement by the payer's bank. While merchants may be under the (outdated) impression that bank transfers are permanent, this is no longer the case as the SEPA rules
116:
One method of combating friendly fraud is to create a feature in the product that checks in with the merchant's database. If a chargeback is issued, the merchant can tell the product to suspend service. This tactic will also work for digital subscription services or any other online product that
112:
Friendly fraud thrives in the digital products market where it is much easier for fraudsters to succeed. Common targets include pornography and gambling websites. Attempts by the merchant to prove that the consumer received the purchased goods or services are difficult. Again, the use of card
61:
MasterCard was sued in 2003 by an
Internet vendor for having credit card policies and fees that have made Internet vendors especially vulnerable targets of friendly fraud. Internet vendors typically have to pay much of the losses when a fraudulent transaction like friendly fraud occurs.
453:
Directive (EU) 2015/2366 of the
European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (Text with EEA
168:
The international card payment schemes define rules where the liability shift to the issuing bank of the card becomes liable for the payment if the merchant applied the provided 3D Secure
Authentication Method. For payments within the EEA the liability between the
283:
As an example, UK building society
Nationwide notes under "Important Information" that "A payer can recall a SEPA Credit Transfer within 10 working days of it being paid into your account. If this happens we'll deduct the SEPA Credit Transfer from your account.",
408:
147:
Before the purchase is submitted by the agent, the purchase amount is played back to the consumer along with the last four digits of the card. The consumer is asked to confirm their purchase by providing a verbal signature, which is recorded.
474:
160:
administrative costs. A 2018 study by the Aite Group on charge back costs, stated that U.S. CNP fraud losses for 2017 were $ 4 billion and estimated that by 2020 they would rise to $ 6.4 billion.
286:
140:
directly into the customer relationship management software without the agent ever seeing or hearing it. The agent remains on the phone, so there is no transfer to an
349:
54:
Friendly fraud has been widespread on the
Internet, affecting both the sale of physical products and digital transactions. To combat digital transaction fraud,
46:, and the consumer receives a refund of the money they spent. Dependent on the payment method used, the merchant can be accountable when a chargeback occurs.
199:
224:
88:
on the credit card to fight "Card absent environment" or "Card Not
Present" (CNP) chargebacks. These are the three digit codes on the backs of
117:
requires updates or logins. The merchant will usually still be charged a fee for incurring a chargeback, so this is not a complete solution.
312:
290:
266:
1021:
151:
Finally, an email is sent to the consumer with the purchase information and an attached audio file of their verbal signature.
378:
1211:
838:
394:
136:
technology is available for call centers that allows customers to enter their credit card information, including the
84:
help in the resolution of chargeback disputes but contractually is no guarantee. Also, the merchant can request the
1709:
1221:
544:
433:
1657:
617:
368:
500:
1494:
1378:
1176:
1119:
144:
system. All the agent can hear is monotones. This is the "card present" equivalent of "swiping" the card.
1530:
1166:
1551:
1014:
228:
141:
475:"Regulatory Technical Standards on strong customer authentication and secure communication under PSD2"
1561:
1504:
1277:
1246:
1201:
1154:
133:
1637:
1617:
1566:
170:
1302:
181:
machine-learning based (or AI) fraud prevention system to make rapid, effective risk decisions.
1662:
1171:
978:
782:
679:
251:
1627:
1601:
1509:
1297:
1007:
950:
926:
43:
1647:
1460:
1292:
1267:
1206:
1067:
587:
323:
42:
after receiving the purchased goods or services. Once approved, the chargeback cancels the
8:
1622:
1403:
1368:
1347:
1337:
1307:
921:
689:
537:
1586:
1312:
1236:
1181:
1139:
965:
684:
370:
Preventing Credit Card Fraud: A Complete Guide for
Everyone from Merchants to Consumers
137:
85:
1642:
1596:
1478:
1473:
1393:
1332:
1129:
773:
647:
374:
55:
1652:
1591:
1432:
1388:
1373:
1342:
1327:
1322:
1062:
1052:
812:
807:
763:
758:
741:
597:
578:
573:
101:
1525:
1408:
1398:
999:
843:
787:
777:
725:
715:
652:
632:
451:
27:
173:
of the payee and payment service provider of payment service user is regulated.
58:
cards have been offered as an effective alternative to ensure customer payment.
1688:
1420:
988:
916:
874:
848:
802:
669:
637:
622:
612:
530:
177:
89:
1703:
1149:
1109:
1084:
906:
879:
858:
792:
720:
657:
568:
97:
66:
1683:
1468:
1440:
1383:
1191:
938:
768:
746:
694:
674:
607:
39:
200:"Council Post: Friendly Fraud Looms Large As New Pay Later Options Arrive"
1535:
1282:
1034:
1030:
960:
896:
889:
884:
822:
642:
592:
31:
1667:
1499:
1445:
1251:
1079:
1057:
1038:
943:
853:
797:
753:
699:
602:
583:
93:
35:
817:
1134:
1114:
1089:
1074:
627:
1450:
1415:
1287:
1272:
1241:
1196:
1186:
662:
1556:
1144:
1124:
955:
901:
522:
126:
working to make the purchases more like card present purchases.
1317:
1226:
1161:
1352:
1231:
1216:
554:
395:"Disputing Chargebacks: 8 Questions Merchants Ask Most Often"
65:
In recent years, a new variant of friendly fraud, involving
933:
911:
1632:
347:
499:
Care, Jonathan; Phillips, Tricia (January 31, 2018).
492:
367:
Lee, Jen
Grondahl; Scott, Gini Graham (2017-03-17).
348:
Ritchtell, Matt; John
Schwartz (November 18, 2002).
267:"Company Sues MasterCard Over Fees for Online Sales"
252:"Nexon's Min Kim On The Power Of Microtransactions"
1029:
313:"Card Payments and Consumer Protection in Germany"
1544:
1701:
409:"2016 LexisNexis® True Cost of Fraud 7 SM Study"
350:"Credit Cards Seek New Fees on Web's Demimonde"
100:cards, and the four digit code on the front of
1015:
538:
498:
120:
1022:
1008:
545:
531:
501:"Market Guide for Online Fraud Detection"
249:
366:
250:Sheffield, Brandon (September 7, 2007).
107:
1702:
431:
311:Yang, Maximilian (September 1, 2016).
1003:
526:
264:
222:
163:
310:
154:
78:
432:Conroy, Julie (November 15, 2018).
13:
1177:European Payments Initiative (EPI)
552:
258:
14:
1721:
1167:Electronic Payment Services (EPS)
434:"The Global Chargeback Landscape"
341:
304:
277:
243:
216:
197:
984:
983:
223:Poole, Riley (January 5, 2008).
26:occurs when a consumer makes an
467:
444:
425:
401:
227:. Merchant Talk. Archived from
1658:Personal identification number
387:
360:
225:"Understanding Friendly Fraud"
191:
1:
265:Bayot, Ruben (May 13, 2003).
184:
1495:Card not present transaction
1379:Credit card balance transfer
457:, vol. OJ L, 2015-12-23
397:. Ethoca. November 26, 2020.
373:. Rowman & Littlefield.
7:
73:
10:
1726:
479:European Banking Authority
142:interactive voice response
49:
1676:
1610:
1579:
1518:
1505:Controlled payment number
1487:
1459:
1431:
1361:
1260:
1100:
1045:
974:
867:
831:
734:
708:
561:
287:"All about SEPA Payments"
134:Agent-assisted automation
1638:Hardware security module
1618:Automated teller machine
1404:Current/checking account
320:Anglo-German Law Journal
171:payment service provider
121:Call center transactions
30:purchase with their own
1710:Credit card terminology
1663:Secure cryptoprocessor
34:, and then requests a
1628:Credit card imprinter
1602:Credit card hijacking
618:Intellectual property
176:The proliferation of
44:financial transaction
1648:Magnetic stripe card
231:on December 30, 2011
108:Digital transactions
1623:Contactless payment
1369:Payment card number
1587:Card security code
1545:Interbank networks
1182:Forbrugsforeningen
966:White-collar crime
832:Government-related
164:Prevention methods
138:card security code
86:card security code
16:Type of bank fraud
1697:
1696:
1643:Interbank network
1597:Credit card fraud
1575:
1574:
1479:Universal default
1474:Introductory rate
1394:Revolving account
997:
996:
735:Financial-related
440:. Aite Group LLC.
380:978-1-4422-6800-5
155:Cost to merchants
79:Physical products
1717:
1653:Payment terminal
1592:Chargeback fraud
1542:
1541:
1389:Installment loan
1374:Card association
1323:Rail Travel Card
1053:American Express
1024:
1017:
1010:
1001:
1000:
987:
986:
562:Business-related
547:
540:
533:
524:
523:
517:
516:
514:
512:
496:
490:
489:
487:
486:
471:
465:
464:
463:
462:
448:
442:
441:
429:
423:
422:
420:
419:
413:
405:
399:
398:
391:
385:
384:
364:
358:
357:
345:
339:
338:
336:
334:
328:
322:. Archived from
317:
308:
302:
301:
299:
298:
289:. Archived from
281:
275:
274:
262:
256:
255:
247:
241:
240:
238:
236:
220:
214:
213:
211:
210:
195:
102:American Express
24:chargeback fraud
22:, also known as
1725:
1724:
1720:
1719:
1718:
1716:
1715:
1714:
1700:
1699:
1698:
1693:
1672:
1606:
1571:
1540:
1514:
1483:
1455:
1427:
1409:Savings account
1399:Deposit account
1357:
1328:Revolution Card
1256:
1103:specialty cards
1102:
1096:
1041:
1028:
998:
993:
970:
927:honest services
863:
827:
730:
704:
557:
551:
521:
520:
510:
508:
497:
493:
484:
482:
473:
472:
468:
460:
458:
450:
449:
445:
430:
426:
417:
415:
411:
407:
406:
402:
393:
392:
388:
381:
365:
361:
346:
342:
332:
330:
329:on July 5, 2017
326:
315:
309:
305:
296:
294:
285:
282:
278:
263:
259:
248:
244:
234:
232:
221:
217:
208:
206:
196:
192:
187:
166:
157:
123:
110:
81:
76:
52:
28:online shopping
17:
12:
11:
5:
1723:
1713:
1712:
1695:
1694:
1692:
1691:
1689:Acquiring bank
1686:
1680:
1678:
1674:
1673:
1671:
1670:
1665:
1660:
1655:
1650:
1645:
1640:
1635:
1630:
1625:
1620:
1614:
1612:
1608:
1607:
1605:
1604:
1599:
1594:
1589:
1583:
1581:
1577:
1576:
1573:
1572:
1570:
1569:
1564:
1559:
1554:
1548:
1546:
1539:
1538:
1533:
1528:
1522:
1520:
1516:
1515:
1513:
1512:
1507:
1502:
1497:
1491:
1489:
1485:
1484:
1482:
1481:
1476:
1471:
1465:
1463:
1457:
1456:
1454:
1453:
1448:
1443:
1437:
1435:
1429:
1428:
1426:
1425:
1424:
1423:
1413:
1412:
1411:
1406:
1396:
1391:
1386:
1381:
1376:
1371:
1365:
1363:
1359:
1358:
1356:
1355:
1350:
1345:
1340:
1335:
1330:
1325:
1320:
1315:
1310:
1305:
1300:
1295:
1290:
1285:
1280:
1275:
1270:
1264:
1262:
1258:
1257:
1255:
1254:
1249:
1244:
1239:
1234:
1229:
1224:
1219:
1214:
1209:
1204:
1199:
1194:
1189:
1184:
1179:
1174:
1169:
1164:
1159:
1158:
1157:
1147:
1142:
1137:
1132:
1127:
1122:
1117:
1112:
1106:
1104:
1098:
1097:
1095:
1094:
1093:
1092:
1087:
1082:
1072:
1071:
1070:
1065:
1055:
1049:
1047:
1043:
1042:
1027:
1026:
1019:
1012:
1004:
995:
994:
992:
991:
981:
975:
972:
971:
969:
968:
963:
958:
953:
948:
947:
946:
941:
931:
930:
929:
919:
914:
909:
904:
899:
894:
893:
892:
885:Counterfeiting
882:
877:
871:
869:
865:
864:
862:
861:
856:
851:
846:
841:
835:
833:
829:
828:
826:
825:
820:
815:
810:
805:
800:
795:
790:
785:
780:
771:
766:
761:
756:
751:
750:
749:
738:
736:
732:
731:
729:
728:
723:
718:
712:
710:
709:Family-related
706:
705:
703:
702:
697:
692:
687:
682:
677:
672:
667:
666:
665:
660:
655:
645:
640:
635:
630:
625:
620:
615:
610:
605:
600:
595:
590:
588:Pharmaceutical
581:
576:
571:
565:
563:
559:
558:
550:
549:
542:
535:
527:
519:
518:
507:. Gartner, LLC
491:
466:
443:
424:
400:
386:
379:
359:
354:New York Times
340:
303:
276:
271:New York Times
257:
242:
215:
189:
188:
186:
183:
178:online payment
165:
162:
156:
153:
122:
119:
109:
106:
80:
77:
75:
72:
67:bank transfers
51:
48:
20:Friendly fraud
15:
9:
6:
4:
3:
2:
1722:
1711:
1708:
1707:
1705:
1690:
1687:
1685:
1682:
1681:
1679:
1675:
1669:
1666:
1664:
1661:
1659:
1656:
1654:
1651:
1649:
1646:
1644:
1641:
1639:
1636:
1634:
1631:
1629:
1626:
1624:
1621:
1619:
1616:
1615:
1613:
1609:
1603:
1600:
1598:
1595:
1593:
1590:
1588:
1585:
1584:
1582:
1578:
1568:
1565:
1563:
1560:
1558:
1555:
1553:
1550:
1549:
1547:
1543:
1537:
1534:
1532:
1529:
1527:
1524:
1523:
1521:
1517:
1511:
1508:
1506:
1503:
1501:
1498:
1496:
1493:
1492:
1490:
1486:
1480:
1477:
1475:
1472:
1470:
1467:
1466:
1464:
1462:
1458:
1452:
1449:
1447:
1444:
1442:
1439:
1438:
1436:
1434:
1430:
1422:
1419:
1418:
1417:
1414:
1410:
1407:
1405:
1402:
1401:
1400:
1397:
1395:
1392:
1390:
1387:
1385:
1382:
1380:
1377:
1375:
1372:
1370:
1367:
1366:
1364:
1360:
1354:
1351:
1349:
1346:
1344:
1341:
1339:
1336:
1334:
1331:
1329:
1326:
1324:
1321:
1319:
1316:
1314:
1311:
1309:
1306:
1304:
1301:
1299:
1296:
1294:
1291:
1289:
1286:
1284:
1281:
1279:
1278:Carte Blanche
1276:
1274:
1271:
1269:
1266:
1265:
1263:
1261:Defunct cards
1259:
1253:
1250:
1248:
1245:
1243:
1240:
1238:
1235:
1233:
1230:
1228:
1225:
1223:
1220:
1218:
1215:
1213:
1210:
1208:
1205:
1203:
1200:
1198:
1195:
1193:
1190:
1188:
1185:
1183:
1180:
1178:
1175:
1173:
1170:
1168:
1165:
1163:
1160:
1156:
1153:
1152:
1151:
1148:
1146:
1143:
1141:
1138:
1136:
1133:
1131:
1128:
1126:
1123:
1121:
1118:
1116:
1113:
1111:
1108:
1107:
1105:
1099:
1091:
1088:
1086:
1083:
1081:
1078:
1077:
1076:
1073:
1069:
1066:
1064:
1061:
1060:
1059:
1056:
1054:
1051:
1050:
1048:
1044:
1040:
1036:
1032:
1025:
1020:
1018:
1013:
1011:
1006:
1005:
1002:
990:
982:
980:
977:
976:
973:
967:
964:
962:
959:
957:
954:
952:
949:
945:
942:
940:
937:
936:
935:
932:
928:
925:
924:
923:
922:Mail and wire
920:
918:
917:Impersonation
915:
913:
910:
908:
907:Fraud factory
905:
903:
900:
898:
895:
891:
888:
887:
886:
883:
881:
878:
876:
873:
872:
870:
866:
860:
857:
855:
852:
850:
847:
845:
842:
840:
837:
836:
834:
830:
824:
821:
819:
818:Shill bidding
816:
814:
811:
809:
806:
804:
801:
799:
796:
794:
791:
789:
786:
784:
781:
779:
775:
772:
770:
767:
765:
762:
760:
757:
755:
752:
748:
745:
744:
743:
740:
739:
737:
733:
727:
724:
722:
719:
717:
714:
713:
711:
707:
701:
698:
696:
693:
691:
690:Telemarketing
688:
686:
683:
681:
678:
676:
673:
671:
668:
664:
661:
659:
658:Ghost network
656:
654:
651:
650:
649:
646:
644:
641:
639:
636:
634:
631:
629:
626:
624:
621:
619:
616:
614:
613:Impersonation
611:
609:
606:
604:
601:
599:
596:
594:
591:
589:
585:
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1684:Issuing bank
1469:Grace period
1441:Cash advance
1384:Credit limit
1192:Hyundai Card
1101:Regional and
747:lottery scam
680:Tech support
670:Racketeering
509:. Retrieved
504:
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483:. Retrieved
481:. 2019-04-12
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459:, retrieved
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414:. LexisNexis
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40:issuing bank
23:
19:
18:
1536:Card scheme
1519:Interchange
1283:Carte Bleue
1155:Diners Club
1046:Major cards
1039:debit cards
897:Faked death
890:Superdollar
868:Other types
808:Overpayment
774:Credit card
742:Advance-fee
648:Health care
505:gartner.com
333:October 25,
32:credit card
1668:Smart card
1611:Technology
1500:Chargeback
1446:Charge-off
1308:Everything
1058:Mastercard
951:Scientific
813:Securities
798:Mismarking
764:Chargeback
759:Bankruptcy
598:Employment
579:Disability
485:2021-04-01
461:2021-04-01
454:relevance)
418:2016-05-01
297:2017-10-25
209:2023-06-23
185:References
94:MasterCard
36:chargeback
1531:Surcharge
1135:Cabcharge
1115:AzeriCard
844:Electoral
788:Insurance
726:Paternity
716:Fertility
653:fertility
633:Long firm
553:Types of
511:3 January
38:from the
1704:Category
1580:Security
1461:Interest
1451:Debt-lag
1416:ATM card
1362:Accounts
1303:Eurocard
1288:Chipknip
1273:Bankcard
1242:UnionPay
1197:Isracard
1187:Girocard
1150:Discover
1130:BCA Card
1120:Bancomat
1085:Electron
989:Category
875:Affinity
849:Medicare
803:Mortgage
721:Marriage
685:Slamming
663:quackery
638:Odometer
623:Internet
574:Cramming
235:June 22,
98:Discover
74:Overview
1677:Banking
1557:Interac
1510:Dispute
1488:Payment
1298:enRoute
1145:Dankort
1125:BC Card
1068:Maestro
956:Spyware
939:Romance
902:Forgery
880:Charity
859:Welfare
839:Benefit
793:Lottery
778:carding
569:Billing
104:cards.
56:prepaid
50:History
1552:Cirrus
1348:Proton
1338:Switch
1318:Mondex
1293:Choice
1268:Access
1227:PayPak
1162:EFTPOS
1035:charge
1031:Credit
769:Cheque
695:Weight
675:Return
608:Fixing
377:
204:Forbes
96:, and
1562:Pulse
1353:V Pay
1313:Laser
1252:Verve
1232:RuPay
1217:Meeza
1080:Debit
1063:Debit
961:Vomit
944:Bride
783:Forex
643:Phone
593:Email
555:fraud
412:(PDF)
327:(PDF)
316:(PDF)
1567:Plus
1433:Debt
1421:Fees
1333:Solo
1247:UATP
1237:Troy
1222:NETS
1212:MEPS
1110:ArCa
1090:Cash
1075:Visa
1037:and
979:list
934:Scam
912:Hoax
854:Visa
776:and
754:Bank
700:Wine
603:Food
584:Drug
513:2019
375:ISBN
335:2017
237:2022
90:Visa
1633:EMV
1526:Fee
1343:PIN
1207:Mir
1202:JCB
1172:Elo
823:Tax
628:Job
1706::
1140:CB
1033:,
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