Visa changes credit card chargeback rules to fight off friendly fraud
Amid the surge in e-commerce sales during the pandemic, payment card fraud has taken on a new form known as “friendly fraud”.
This type of fraud involves consumers disputing legitimate purchases, claiming that they did not receive the item or do not remember making the purchase. According to Visa, friendly fraud can account for up to 75% of all chargebacks.
To help merchants address this problem, Visa has announced changes to its chargeback rules that will allow them to provide additional information to prove the legitimacy of a transaction. These changes will go into effect on April 15, 2023, and will enable merchants to provide evidence of the customer’s previous use of the same payment credential, login credentials, and product usage.
The changes were developed in collaboration with clients, the Merchant Risk Council, and the Merchant Advisory Group. The move comes as losses from friendly fraud cost merchants more than $25 billion a year, and a study by Sift Science Inc. found that almost one in five consumers who file a chargeback dispute have committed friendly fraud by making false claims.
Visa hopes that by providing tools to take more fraud out of the equation, it can level the playing field for everyone in the ecosystem.
Prevent fraud and chargebacks with Easy Pay Direct
The move from Visa is a porsitive step forward for all merchants, but it does not stop chargebacks completley.
Get even better protection with a merchant account from Easy Pay Direct equipped with Chargeback alerts.
We will notify you of a chargeback before it hits your account. That wasy you can take preemptive measures and stop the cahrgeback in its tracks.
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