What happens if you lie and initiate a Chargeback?

The short answer is: nothing will happen! Unfortunately.

There is a problem when a legitimate cardholder comes to their issuing bank and declares the transaction fraudulent, or that the product or service was not provided or not received. In the first case, we are dealing with a classic family fraud or it is also called a friendly fraud.

In the second case, this is also a type of family fraud, but less pronounced, and as a rule, such cases are not even taken into account in the statistics of abuse by cardholders.

Identification of the family family is one of the most difficult tasks for modern anti-fraud systems. The fact is that scammers try to match all the parameters in the transaction as much as possible, namely:

1

Specify their real ip address.

2

Use a real email, not a one-time email.

3

Fill in the Cardholder Name field with their name, not someone else's.

In short, the transaction does not look suspicious. Also, no modern anti-fraud system can read a cardholder's mind. Sometimes the client himself does not know yet that tomorrow he will go to the bank and say that he will not recognize this transaction.

Why, then, does the cardholder remain unpunished? There are three main reasons for this:

1

In order to initiate a criminal case, there must be a victim in this situation. But the issuing bank, which contains the maximum amount of necessary information about the client, does not incur losses, and moreover is not interested in going against its client, because this will create a precedent and a negative attitude of other clients. The acquirer has no information that this is a family fraud and does not incur a loss, as it will shift all costs to the merchant. The merchant is aware that the transaction has signs of a family fraud, but the prospect of a court case in favor of the merchant is extremely low.

2

Lack of interest on the part of law enforcement agencies. It is very difficult to prove a case of fraud here, and a lot of costs must be spent, therefore, due to lack of time and resources, the police will refuse to initiate criminal proceedings.

3

Cross-border transactions. Most cases of family fraud are carried out using cards from other countries, which makes the process of initiating criminal proceedings even more difficult.

In this regard, it is only possible to reduce this type of fraud to an acceptable level, but not to eradicate it completely.

What happens if you lie and initiate a Chargeback?

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We wish you a safe business!

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