POSitive Processing Blog

Is Friendly Fraud Putting Your Business at Risk
Wednesday, May 29, 2019

BEWARE THE FRIENDLY FRAUDSTER

Fraud, Fraud Prevention, Chargebacks

With more and more skimming devices being found on ATM’s and gas pumps and merchants experiencing data breaches more frequently, we are often versing ourselves on how to protect ourselves from these fraudulent criminals. But we often forget to guard ourselves against one of the biggest threats there are: The Friendly Fraudster.

The Friendly Fraudster is a customer with impeccable digital risk profiles that pass every fraud screening test but make authorized purchases and later claim them as unauthorized. They order a product or service and provide legitimate billing and shipping information. After receiving their order, they contact the merchant or their card issuing bank and dispute the charge.

Some of the various false claims they can make are:
· Their order never arrived.
· The service was never rendered.
· They don’t recognize the transaction.
· The transaction was unauthorized.
· The goods were damaged.

While this isn’t the traditional eCommerce fraud you imagine, Friendly Fraud is a very real threat and merchants should be aware.
Consider this:

· Merchants lost $11.8 billion to cases of friendly fraud in 2012 and 40% of consumers who engage in friendly fraud will do so again within the next 90 days.
· Friendly Fraud has risen 41% since 2011 and 86% of chargebacks are linked to friendly fraud.
· Friendly Fraud is one of the top three threats to eCommerce, according to the FBI.

So what can you do when a customer goes bad?
1. Clearly communicate: Merchants should be upfront and clear with customers about their policies and practices and then immediately email order invoices. This will lessen the possibility of the charge being disputed.

2. Know your customer: Use chargeback data and customer service data to analyze a customer’s profile and identify abusive claim patterns. If the same customer, shipping address, etc. is repeatedly associated with claims, it is likely that they are committing friendly fraud.

3. Enforce stricter order processing: Once repeat offenders are identified, make signatures mandatory for proof of delivery for all future orders. Both the signature and now higher shipping fee should be red flags for the customer that he is under scrutiny. Ultimately, the goal is to frustrate fraudsters.

4. Put customers on notice: Notify customers in writing that no further refunds will be issued due to repeated, unwarranted claims.

5. Leverage chargeback representment: Engage in chargeback representment—it informs the card issuer that more due diligence is required the next time the customer requests a bank issued refund.

The bottom line is being vigilant is key to stopping ALL types of fraud, and to be vigilant you must be knowledgeable. Know your risks. Know your equipment. Know your customers. Contact us for more information on how you can better protect your business.

Categories

B2B and E-Commerce Solutions
- 10/13/2017 - Saving on B2B Interchange
- 05/03/2017 - EMV Option Now Available for V
- 02/09/2017 - Why Should Your B2B Business A
Data Security and Fraud Prevention
- 05/29/2019 - Is Friendly Fraud Putting Your
- 04/29/2019 - Gift Cards: The Gift That Thie
- 04/03/2019 - Chargebacks: What Are They and
- 02/13/2019 - 3 Tips To Protect Your Busines
- 11/12/2018 - Are you PCI Compliant?
- 03/14/2018 - Merchant Guide: 10 Essential T
- 02/12/2018 - Common Business Scams and How
- 02/09/2018 - Data Security Fast Facts
- 01/17/2018 - Vulnerability Scanning vs. Pen
- 01/17/2018 - BBB Warns of Email Scams This
- 01/10/2018 - Arm Your Business Against Cybe
- 11/15/2017 - MERCHANT FRAUD ALERT, 11-15-20
- 09/22/2017 - Have You Heard How OMEGA’s Dat
- 08/02/2017 - MERCHANT FRAUD ALERT, 08-02-20
FI Partner Program
- 11/08/2016 - Pursuing the Perfect Payments
Gift Cards and Customer Rewards
- 04/01/2019 - Spring Has Sprung and So Can Y
- 09/06/2018 - The Holidays Are Coming..Are Y
- 08/22/2018 - Sales are up 100%!
- 09/13/2017 - When Should You Start Planning
- 08/18/2017 - Black Friday is Coming!
- 07/19/2017 - Gift and Loyalty: We Have an A
- 02/23/2017 - Boost Spring Sales with OMEGA’
Just For Fun
- 11/14/2018 - Thanksgiving Fun Facts
- 05/24/2017 - Facts You Might Not Know (or M
- 03/13/2017 - Keys To Success — 8 To Be Grea
- 09/02/2016 - Happy Labor Day Weekend!
Miscellaneous
- 06/21/2019 - VeriFone Terminals
- 02/27/2019 - Take The Hassle Out Of Tax Sea
- 02/13/2018 - Innovative Visa Wearables Make
- 02/13/2018 - Little-Known Secrets of Credit
- 07/19/2017 - Beat the Summertime Blues
Mobile Payments
- 11/08/2017 - Mobile Made Easy with OMEGA
- 08/03/2017 - A Good Thing Just Got Better —
- 10/18/2016 - SwipeSimple: Mobile Made Bette
OMEGA in the Community
- 07/05/2017 - Parades, Baseball and the Four
- 03/08/2017 - 9th Region Championship Player
- 02/06/2017 - OMEGA’s Players of the Game
- 01/23/2017 - TWO New OMEGA Player’s of the
- 01/13/2017 - OMEGA’s Defensive Player of th
- 01/09/2017 - 2017’s First OMEGA Player of t
- 11/21/2016 - OMEGA’s Offensive Player of th
- 11/14/2016 - OMEGA Processing Offensive Pla
- 11/10/2016 - OMEGA in the Community
- 11/07/2016 - OMEGA Processing’s Player of t
- 10/31/2016 - OMEGA Processing Player of the
- 10/25/2016 - OMEGA Processing Player of the
- 10/12/2016 - OMEGA Processing’s Player of t
- 10/04/2016 - OMEGA Processing Player of the
- 09/19/2016 - Sergent Wins Player of the Gam
- 09/06/2016 - OMEGA Processing Solutions Pla
OMEGA Merchants, News, and People
- 12/12/2018 - 2018 Year in Review
- 10/17/2018 - OMEGA Processing Solutions Cel
- 07/25/2018 - OMEGA Processing’s Kim Polark
- 05/31/2018 - OMEGA Processing’s Daena Spraf
- 04/20/2018 - Making Every Day Earth Day
- 04/11/2018 - How’s an Extra $100 Sound?
- 12/28/2017 - 2017 Year in Review
- 10/11/2017 - NO Contract. NO ETF. NO Long-T
- 07/05/2017 - OMEGA Processing Solutions Add
- 12/30/2016 - Some of our Favorite Moments
- 09/01/2016 - OMEGA Processing’s Caroline Ok
OMEGA Spotlight
- 08/14/2019 - OMEGA Spotlight - Customer Ser
- 07/23/2019 - OMEGA Spotlight-Eddie's Southe
- 07/10/2019 - OMEGA Spotlight-Barbara Bailey
- 06/25/2019 - OMEGA Spotlight-Big Catz BBQ
- 06/11/2019 - OMEGA Spotlight-Kim Figgins
- 05/23/2019 - OMEGA Spotlight-Kava House & C
- 05/14/2019 - OMEGA Spotlight-Stevie Dumbuya
Payments Industry
- 03/06/2019 - Merchant Rules To Live By
- 01/09/2019 - Account Tune Up for the New Ye
- 09/19/2018 - Has Your Bottom Line Seen the
- 09/18/2018 - Are Your Business Merchants’ S
- 05/22/2018 - Interchange Explained
- 04/11/2018 - What to Avoid When Searching f
- 04/06/2018 - The Importance of Choosing You
- 12/21/2017 - The Basics of Chargebacks
- 12/12/2017 - No Need to Sign on the Dotted
- 07/26/2017 - Back to the Basics - Merchant
- 03/17/2017 - Innovation Project 2017
Point-of-Sale Systems
- 09/06/2017 - Turning a Tablet Into a Top Sa
Products and Services
- 07/31/2019 - Mid-Summer Reboot
- 10/03/2018 - Are Your Business Customers Se
- 08/15/2018 - Introducing Poynt… The World’s
- 06/11/2018 - Interchange Savings Tool Now A
- 01/03/2018 - Data Breach? We Got Your Back
- 12/27/2017 - How Does OMEGA Protect Your Cu
- 12/12/2017 - New Year? New Goals? New Capit
- 12/06/2017 - Process with the Best
- 09/06/2017 - Unlock Cash Flow Opportunities
- 08/30/2017 - Are You Hungry for the Details
- 08/09/2017 - Happy (2nd) New Year!
- 11/30/2016 - Are You Ready?
Short-Term Capital Funding
- 09/28/2017 - No-Hassle Business Funding fro
- 12/30/2016 - What’s on Your Business Wish L

Tag Cloud

WHAT OUR MERCHANTS ARE SAYING

"The responsiveness of our sales representative was outstanding and she was able to come to our business several times to assist with the transition. Your pricing and the product features were also outstanding."

Halmar Corporation

"Our representative has been excellent to work with. If I ever call, she either answers or calls me back just a couple of minutes later. She's saved me a ton of money, and the service is excellent."

Giovannis

"When we were considering switching to OMEGA for our credit card processing, our Account Rep spent a lot of time explaining the savings we could expect and why. He explained how to read the monthly statements and what the process would be for switching. He answered all of my questions patiently and completely. The process could not have been easier."

Horton Family Dental

"We really appreciate OMEGA Processing's Online Merchant Portal. It's very easy to access and, most importantly, it's easy to understand. OMEGA's way of doing things is so much easier than our prior processor!"

Swain's Furniture

"OMEGA Processing's quick response and focus on service and cost effectiveness is outstanding. I would recommend OMEGA to any of my colleagues with a dental or medical practice."

John Strief, D.D.S.

"I wanted to tell you what amazing sales and support team you have. I worked with Dennis and Becca and they are amazing! We really appreciate the service and follow up service we receive from both of them. As small business owners that personal touch means a lot. Again thank you for your team's great customer service before and after the sale."

Hoover Chiropractic Clinic

"We always receive top-notch service from OMEGA. Reps return calls/emails quickly and either have answers or can find them almost immediately. Keep up the great work!"

Sumerel Tire Service, Inc.

"I was so impressed with Julianne from your Customer Service Department, with whom I worked this morning. She was patient, kind and knowledgeable. Really a huge help to me!"

Relogistics LLC

"I love that I can call, speak to a person on a personal level who is friendly and always takes time to help. Statements are clear and easy to understand."

Expert Auto Service Inc.

HOME

SALES AGENTS

VIRTUAL
TERMINAL LOGIN

Copyright © 2019 OMEGA Processing Solutions, All rights reserved. | Privacy Policy | Terms and Conditions

OMEGA Processing Solutions is a registered ISO/MSP of Deutsche Bank Trust Company Americas, New York, New York.
OMEGA Processing Solutions is a registered ISO/MSP of Woodforest National Bank, Houston, Texas