Europe’s first chargeback remediation specialist releases educational white paper to help merchants equip themselves to tackle the rising problem of friendly fraud
Dublin, Ireland. 2nd April 2015 – Global Risk Technologies, a leading technology company specialising in chargeback compliance, today releases a new white paper examining the threat of friendly fraud in Card-Not-Present (CNP) transactions and examines why this problem continues to get worse.
Ecommerce is growing at close to 20% per year in the EU, while total ecommerce revenues are predicted to be €185.39 billion for 2015. It is important that consumers can buy with confidence if this trend is to continue.
The problem is that friendly fraud has been growing 41% in recent years, costing over €10billion in industry losses, compared to around €2billion lost through ID fraud, according to Visa.
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. The chargeback system is essentially cannibalising their own profits.
The three main forces currently influencing the situation in Europe are:
- Merchants who are unable to tackle the problem effectively
- Consumers who wouldn’t consider themselves fraudsters are carrying out fraudulent activity
- Card schemes are unwilling to properly address the fraud
Monica Eaton-Cardone, CIO at Global Risk Technologies commented: “Europe is ‘leading’ the way in friendly fraud activity and merchants will continue to be at risk unless they face up to the problem and act decisively. Otherwise, as ecommerce continues to boom, so will friendly fraud.
“Global Risk Technologies is releasing this white paper to educate merchants on the threat of friendly fraud and how they can reduce their risk. The paper explains ways that merchants, specifically SMEs, can equip themselves to tackle friendly fraud and protect themselves against financial, operational and reputational damage. “
To download the free Friendly Fraud white paper, visit: http://bit.ly/grtffwp
About Global Risk Technologies:
Headquartered in Dublin, Ireland, Global Risk Technologies provides a comprehensive and highly scalable enterprise solution for chargeback compliance, risk mitigation, fraud management and merchant sustainability services to European acquirers, card issuers and local merchants.
The Global Risk Technologies solution is designed to meet the appetite in Europe for effective, sustainable chargeback remediation, providing highly scalable and sustainable technology for outsourced post-chargeback processing, risk mitigation and merchant education. It helps decrease the negative impacts of chargebacks, thereby increasing processing retention and revenues, and helping combat cyber-shoplifting, resulting in sustainable, secure growth.