The news: Friendly fraud incidents have risen between 20% and 30% in 2022 across global markets, Visa’s chief risk officer, Paul Fabara, told Axios.
Key context: Friendly fraud is when consumers report legitimate transactions as fraud. This can occur in a few different scenarios—only some of which are intentional.
- A customer forgets about or doesn’t recognize a transaction they made.
- Someone else in the customer’s household, like a child or spouse, uses their card without them knowing.
- A customer claims the item they ordered wasn’t delivered or doesn’t match the description and they don’t want it anymore.
It’s often difficult for banks to prove friendly fraud because it’s committed by legitimate customers who are making valid transactions, and it’s challenging to decipher malicious intent, according to Seon. Friendly fraud is committed by 17% of consumers who file chargebacks, per Sift.
Read the full article here: https://www.insiderintelligence.com/content/rise-friendly-fraud-highlights-growing-losses-merchants-issuers
