Gary Cardone Outlines How Friendly Fraud is Affecting the Gaming Industry

I don’t know anyone that doesn’t defend something when it is taken from them. Over the last decade, with nearly every vertical in payments, it has been the status quo to not fight chargeback disputes, because it’s a cost of doing business. Chargebacks are up 155% for the last four years and 41% in the last two years. This week the name came up in an unexpected context – fighting credit card chargebacks. EFYTimes reported that Kohli, in his capacity as CEO of Grafix Softech, has announced a new product to guard against chargebacks experienced by online casino operators. Casinos will definitely 100% blacklist you at the casino if you charge back and if you're luck and only if you're lucky you'd still be able to play at the casino but only by using deposit methods that are of '0' risk to the casino in terms of chargebacks.

Friendly fraud is not a new phenomenon, nor is it exclusive to particular industries or payment channels. Illegitimate chargebacks affect everyone.

Free game no download slots. What is new is the idea that friendly fraud is a needless revenue drain. Merchants are finally realizing there is something that can be done about this formerly unmanageable threat.

Chargebacks911 CEO, Gary Cardone, sat down with David Cook from Gambling Insider. In his interview, Cardone explained the concept of friendly fraud and helped gaming operators recognize their representment rights.

Friendly Fraud: The Universal Threat

Cardone was quick to point out that no industry is immune to chargeback fraud.

Chargebacks911 was launched in 2009. From the very beginning, the company has served a diverse population, assisting clients of all sizes in all industries.

We are yet to find a vertical that doesn’t have a substantial chargeback problem. It is staggering. Every vertical has a problem. It doesn’t matter if the merchant is a digital or physical merchandise provider. Whatever brand, whatever product you have, there is a fraud problem because ecommerce is growing.”

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Cardone went on to discuss how this fraud is impacting gaming operators specifically.

How Friendly Fraud Plays Out in the Gaming Industry

Friendly fraud in the gaming industry is triggered by several different things.

Remorse over gambling debt
An inability to recognize the merchant’s name on a credit card statement or remember the bet
An intentional purchase made by an authorized card user (spouse) that the primary cardholder assumes is fraud

Cardone gave the following example. While out of town for business, a husband places a big bet with an online gambling site. The next day, the wife notices the charge and assumes a fraudster has hacked her account. She calls the bank and requests a chargeback for the supposedly unauthorized transaction.

The over-worked, under-paid bank employee fulfils the persistent woman’s request without sufficiently researching the wife’s claim.

The husband authorized the transaction. He participated in the purchase, but the merchant loses big time.

One of the biggest reasons why friendly fraud remains unchallenged by merchants is because they are unable to identify it.

I asked a guy today: ‘How do you define fraud?’ He couldn’t answer my question.”

Merchants need to first determine which chargeback cases are illegitimate because they are 100% disputable. It’s possible to recover lost revenue, but merchants must identify which cases they can fight.

Read More: The Only Way to Determine the REAL Reason Behind the Reason Code

It’s Time to Fight Back

Chargeback fraud has gone unchallenged for far too long. Merchants are needlessly losing revenue.

'I don’t know anyone who wouldn’t defend himself if something was taken from him. Yet, over the last decade, with nearly every vertical in payments, it has been the status quo to not fight chargebacks because they are assumed to be just a cost of doing business”

It’s time to end the myth.

Chargeback Fee

Chargeback fraud is manageable. It is preventable and disputable. With the right tools and expert assistance, merchants can win the war against friendly fraud.

How To Fight Chargeback Fraud

If you’d like assistance from Chargebacks911®, contact us today. We’d be happy to help.

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