Identifying fraud a massive problem for retailers
With the recent rise in successful online/mobile fraud attempts and false positives, LexisNexis has released a new report which cites “the ability to quickly distinguish and confirm fraud” as a great challenge for remote merchants.
According to the report, large multi-channel, eCommerce and mCommerce merchants experience between 707 and 880 fraud attempts each month, with upwards of 60% of those attempts occurring successfully. However, these merchants still have difficulties identifying fraud—the aforementioned retailers report that 1 in 3 declined transactions for suspected fraud turned out to be legitimate purchases.
Monica Eaton-Cardone, co-founder and COO of risk management firm Chargebacks911, says the greatest issue for large remote merchants is figuring out how to successfully identify and fight fraud without turning away legitimate customers.
To resolve these issues, Eaton-Cardone developed her own proprietary technology. As a former online remote-channel merchant who was plagued with fraudulent chargebacks, Eaton-Cardone said she was shocked to find there was no up-to-date solution for merchants. Eaton-Cardone facilitated Chargebacks911 to accurately distinguish between merchant error, criminal fraud and friendly fraud.
“Friendly fraud is a correct transaction where the merchant did everything right, but the customer claimed it wasn’t them…it looks and acts just like a genuine sale – because it is one,” she says. “The best way to identify fraud is to contact the cardholder to find out the details and identify why they filed a chargeback. The merchant will probably find out the customer was upset about a service request, etc. – and will fully admit that they did in fact intentionally order the merchandise…this is proof that the chargeback was in fact filed as friendly fraud.”
“Merchants need to effectively dispute unjustified chargebacks, but also assess and change practices that may be contributing to errors or approval of unauthorized transactions,” she adds.
For more information on how Chargebacks911 can help you or to sign up for its services, visit chargebacks911.com.