As ecommerce grows, so does friendly fraud

Friday 3 April 2015 11:42 CET | News

With ecommerce growing at close to 20% per year in the EU, friendly fraud is growing as well, a recent report unveils.

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.

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: fraud prevention, web fraud, digital identity, online security, risk management, cybercrime, chargeback, ecommerce
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime

Industry Events