Payments
Friendly fraud
Updated
Friendly fraud is when a real cardholder makes a purchase and later disputes it with their bank as unauthorised or unreceived instead of asking the merchant.
Stripe also calls it first-party misuse or first-party fraud. The buyer is the genuine cardholder: they forgot the purchase, did not recognise the name on their statement, let a family member use the card, or regretted the order and found the chargeback easier than a return.
It is hard to prove, especially for digital goods, because the payment looks like any other. Visa's Compelling Evidence 3.0 was created partly for this: showing earlier undisputed purchases by the same customer can defeat a fraud claim.
Prevention is mostly clarity. A recognisable statement descriptor, order confirmation and shipping emails, reminders before subscription renewals, and an easy refund path all give the customer a better option than calling their bank.
Frequently asked questions
- Is friendly fraud illegal?
- Knowingly disputing a genuine purchase can be, but much friendly fraud is confusion, such as not recognising a statement descriptor or a forgotten subscription.
- How do I prove friendly fraud?
- With evidence the cardholder made the purchase: matching IP address and device, delivery to their address, account login history, and for Visa fraud disputes, Compelling Evidence 3.0 history.