Chargebacks911: Rising payment fraud in UK overwhelming merchants with misunderstood chargebacks

Europe’s first and only chargeback remediation specialist Chargebacks911, owned by Global Risk Technologies, is urging merchants to understand and use reason codes in the light of newly released fraud statistics.

The figures from Financial Fraud Action UK reveal that financial fraud losses grew by 26% in 2015. The research further highlights the growth in payment card fraud, up 18% over the same period to £567.5m and the value of card-not-present (CNP) fraud, including ecommerce, which was up 20% to £398.2m.

Monica Eaton-Cardone, co-founder, comments: “These are staggering figures, illustrating a worrying upward trend in online fraud. The adoption of EMV in the US is pushing more fraudsters online, while complex new technologies have made it difficult for merchants to offer omnichannel experiences while remaining secure. Internationally, fraud on UK cards from overseas has risen 25% in the last year, according to FFA, and it’s clear merchants are struggling.”

Chargebacks911 has seen friendly fraud rise 150% since 2009, while chargebacks grew 55% in the same period. Part of the cost problem for merchants is that when they are hit by fraud they do not fully understand the reason codes reported back to them by the issuing bank.

Each card network, such as MasterCard or Visa, has its own unique set of chargeback reason codes, informing merchants of a host of reasons why they may have been hit with a chargeback, including:

• Merchandise or services not received
• Cancelled recurring transactions
• Counterfeit transactions
• Goods or services defective or not as described

Reason codes were first created as a valuable tool to help merchants understand chargeback management and analysis, but with the advent of friendly fraud, they have become less insightful. Payment networks often address consumer grievances differently, so Chargebacks911 prefers to categorise chargebacks for merchants by breaking it down to three main causes:

• Merchant error
• Criminal fraud
• Friendly fraud

Monica Eaton-Cardone concludes: “Once a merchant understands the true reasons behind chargebacks against them, they can put in place the necessary steps to successfully dispute fraudulent claims, and best practice processes to minimise the risk of them happening again. This is what we fight for every day for our clients and it has a demonstrable impact on their business performance.”

About Chargebacks911

Chargebacks911, a company of Global Risk Technologies, focuses on chargeback mitigation and risk management. It specialises in servicing Internet merchants and acquiring banks, offering dispute response solutions and deep analytics. Chargebacks911 works with its clients to help them keep dispute rates down and retain their ability to accept credit cards. For more information, visit www.chargebacks911.com and www.globalrisktechnologies.com

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