Here are some examples of what is considered friendly fraud: However, you will want to bear in mind that the consequences of these two types of fraud for merchants can be similarly devastating – and that, despite its lack of sophistication, or perhaps exactly because of it, friendly fraud is sometimes even more difficult to detect than traditional fraud committed by a professional fraudster. Meanwhile, traditional fraud is conducted by a third party and is mainly associated with career criminals, who have knowledge of how fraud schemes work and often have access to specialized tools that help them hide their true identity, location and intentions. The main difference between friendly and traditional fraud is that the former is often opportunistic in nature and is done by a known person: the customer or legitimate cardholder. The challenge lies in proving that a cardholder acted maliciously to defraud a company. While it can happen following a genuine mistake, friendly fraud covers both accidental fraud and malicious fraud. What Is Friendly Fraud?įriendly fraud is where a cardholder files a chargeback against a transaction made on their account, sometimes with the explicit knowledge that they received the product or service. With the pandemic forcing more consumers to turn to eCommerce, the issues of friendly fraud and more prevalent than ever before. But when the cardholder is in fact the perpetrator, it only gets more complicated.

Working in risk management comes with a certain amount of difficulties.

Genuine fraud