Fighting the Right Disputes with the Right Partner

Family Fraud

Recent news headlines highlight growing instances of family fraud in card-on-file, frictionless payment scenarios. Fighting disputes that result from such fraud cases can cause customer attrition and brand damage.
Due to a lack of visibility and authentication in frictionless transactions (such as in-app purchases), mounting a dispute response against a family fraud case – without knowing what transaction data to collect – can weaken your representment and limit your chances of successful recovery.
In short, fighting a chargeback where the merchant cannot provide a good argument that they are selling products and services “in good faith” can easily result as a black mark on that brand.

Expert Partners

As your partner, Verifi first and foremost stands as a champion of your brand. We are sensitive to your customers’ experience and your efforts to build and sustain longevity. Essential to our commitment as a supporting partner is providing you up-to-date information on industry changes, such as:
  • New FTC regulations on digital payments
  • Consumer protection standards set by CFPB
  • Mastercard’s 2019 mandate on negative option billing models
  • Card Association requirements and dispute process

As always, Verifi stands as your proactive, consultative partner to ensure best practices for:

  • Mitigating risk of friendly fraud and family fraud
  • Informed data collection for compelling evidence
  • Effective chargeback representment for optimum profit recovery

Recommendations for Merchants

To help reduce friendly fraud and family fraud, we recommend implementing these basic steps for card-on-file, frictionless payments:
Provide transaction visibility prior to authorization
  • Express a message to ensure that your customer is aware they are about to make a purchase
  • Include the exact amount and billing method (card-on-file account) before they “click”

Brand Value:
Underscores your integrity in customer communication

Confirm the transaction with customer authentication 
  • Examples of authentication requirements:
    • Enter their payment card number or PIN
    • Submit a biometric scan
    • Respond to your text message and confirm with code entry
Brand Value:
Demonstrates that providing secure purchasing is a high priority
Follow up with a digital receipt
  • Send a confirmation email with full transaction details
Brand Value:
Expresses that you appreciate their business and provides an opportunity to extend marketing and sales
In the event of a dispute, including such data as compelling evidence will help build a stronger representment and a better chance of recovering your profits. In addition, it can help build customer longevity and reinforce your brand.