Chargebacks911 Comments on Recent “Friendly Fraud” Issue—College Students Largely at Risk, But Online Merchants Are Often the Ultimate Loser

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Dispute mitigations company Chargebacks 911 comments on the Better Business Bureau’s recently released statement which says college students are the most at-risk of suffering from friendly fraud—but Chargebacks911 says that friendly fraud is an issue that typically leaves online merchants at a loss.

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When a consumer is the victim of friendly fraud, all they have to do is contact their bank and get the charges reversed—but for online merchants, it’s not that simple.

A friendly fraud chargeback only results from card-not-present—or online—transactions, and the term is well known throughout the ecommerce industry. However, friendly fraud is now branching out and targeting the general public, as well—according to the Better Business Bureau, friendly fraud accounts for more than 20% of identity theft crimes on college campuses, often at the hands of friends, roommates and classmates (1). Yet Monica Eaton-Cardone, founder of dispute mitigations company Chargebacks911, says that while friendly fraud does exist in universities, the overwhelming loser in the situation is not college students, but rather the online retailers.

Friendly fraud has two distinct definitions:

1. A consumer makes an online purchase with his/her own credit card, and then instigates a chargeback through the card provider after receiving the goods or services, canceling the transaction and receiving a refund of the money; and

2. A consumer purchases merchandise with the credit cards of close friends or family members.

Despite young adults being considered the most at-risk, Eaton-Cardone says that they aren’t the true victims—the reasoning behind friendly fraud chargebacks cases can vary widely, but they all frequently leave online merchants with a loss:

  • Chargebacks911 periodically surveys customers who filed chargebacks, in order to help improve merchant practices or policies. One consumer stated that the reason she filed a chargeback was “because a collection agency told her that this would be a good way to pay down her credit card bill if she couldn’t afford a payment today.”
  • Recently, an internet blog was created by a consumer to show others how to get products for free by filing a chargeback after they receive it. This ultimately led to a Chargebacks911 client suffering a viral case of friendly fraud which actually led to him losing a relationship with one of his credit card processing accounts.
  • Not all friendly fraud is initiated by consumers: Chargebacks911 investigated several cases of friendly fraud that resulted after credit card companies received bad information about a specific merchant and subsequently alerted their customers of possible merchant fraud. When those customers contacted their banks, many found that a chargeback had been initiated, despite the fact that any wrongdoing had not occurred. According to the customers, the banks only asked whether they had intended to be charged recurring fees by this merchant. When the customers responded with “no,” the bank reversed the charges, as well as any recurring charges that may or may not have been associated with the original sales.

“When a consumer is the victim of friendly fraud, all they have to do is contact their bank and get the charges reversed—but for online merchants, it’s not that simple,” said Eaton-Cardone. “When a dishonest or uninformed customer initiates a friendly fraud chargeback, the merchant is automatically put on the defensive and has to prove that it delivered its products or services. The consumer often wins the case, and the merchant loses valuable time and associated revenue.”

Eaton-Cardone maintains that a merchant can never guarantee that its business won’t receive a friendly fraud chargeback; however, merchants will benefit from being as prepared as possible and remaining one step ahead of the game by instituting just a few simple procedures:

1. Handle customers in a more personal manner, and attempt to resolve account issues timely.

2. Require a signature upon delivery of goods. The signature, in addition to information gathered online, helps clear merchants of any wrongdoing in the resolution of chargeback disputes.

3. Keep customer records and account histories to track suspicious activity and lower the risk of accumulating chargebacks.

Eaton-Cardone, a former online retailer herself, formed Chargebacks911 to relieve merchants of the burden of handling chargebacks. After her own trial and error in experiences with chargeback issues, she wanted to provide fast and reliable services that not only help recoup the loss of funds as a result of increasing chargebacks, but to also curb future chargebacks so that merchants retain all processing abilities.

Chargebacks911 specializes in servicing merchants and the majority of banking institutions. For more information about Chargebacks911 and its services, visit

About Chargebacks911:

Co-founder Monica Eaton-Cardone established Chargebacks911 in September, 2012, out of necessity after many years as a merchant struggling to find a solution to chargeback issues. Chargebacks911 was developed specifically for merchants to offer immediate aid through proprietary technology and provide the necessary function that gives merchants the freedom to focus on their core competency and optimize their in-house skill set. Chargebacks911 specializes in servicing Internet merchants, and offers both response and resolution services for chargebacks and cardholder disputes. The company works with merchant clients to help them keep their dispute rates down and retain their ability to accept credit cards. Chargebacks911 provides a unique exception to standard dispute processing for dissatisfied consumers who wish to remedy transactional disputes, without the requirement of additional intermediaries or lengthy correspondence requirements. For more information, visit

1.“BBB Urging Students to Prevent Identity Theft.” Better Business Bureau, 4 Sept. 2013. Web. 23 Sept. 2013.

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