Friendly Fraud
Fraudulent Chargebacks: Identifying and Preventing Friendly Fraud
Friendly fraud, where a customer initiates a chargeback without valid grounds, continues to challenge merchants worldwide. Learn how to identify and prevent this issue effectively, with support from Kuntn’s fraud prevention tools.
Identifying Friendly Fraud
- Customers disputing charges despite using the service or receiving the product.
- Discrepancies in behavior, such as multiple disputes from a single buyer.
- Cases where customers bypass merchant communication and directly contact their banks.
Friendly fraud accounted for over 60% of chargebacks in 2023. Retailers selling high-ticket items like electronics are particularly vulnerable.
Steps to Dispute Friendly Fraud
- Compile evidence like delivery confirmations, signed agreements, and email communication logs.
- Respond promptly within the dispute timeframe, usually 10–20 days depending on the card network.
- Work with your payment processor to improve dispute success rates.
.png)
Kuntn’s Tools: Kuntn’s friendly fraud detection system uses advanced machine learning to identify high-risk transactions and provides real-time alerts to merchants. Kuntn also automates the evidence compilation process, ensuring merchants submit comprehensive responses to disputes, significantly increasing their win rates.
Preventing Friendly Fraud
- Transparent Descriptions: Avoid ambiguous billing descriptors.
- Proactive Communication: Notify customers about upcoming recurring payments.
- Internal Policies: Implement robust refund processes to minimize unnecessary disputes.
.svg){kind=small}