Lenders denying more credit card charge disputes

By Chris McGill - bio | email 
Posted by Charles Gazaway - email

LOUISVILLE, KY (WAVE) – We are always working to protect you and your family from scams and fraud. Now, we have a new problem to tell you about. It's getting a lot harder to dispute a credit card charge thanks to a new breed of scammers.

It is called "Friendly Fraud" and it is on the rise. Friendly fraud happens when someone orders something, then calls up their lender to say they didn't order it and demands the charge be removed. According to Lexis Nexis, the online information company, 23% of all fraud losses reported by e-commerce sites come from friendly fraud.

A year or two ago, banks usually came down on the side of the customer, and against merchants, with little digging into the case first. But not so anymore. Banks are now investigating these sorts of claims far more thoroughly, and merchants have reacted by requiring signatures for far more goods than ever before. It gives them an additional bit of proof to point to in that scenario, but also creates headaches for folks who aren't home during the day to sign for packages.

Some lenders are going further, requiring consumers to sign affidavits and have them notarized before being issued a credit for the charge.

Merchants are winning a lot more of those cases, too. According to the most recent Merchant Risk Council survey, customers now lose the argument over a charge 44% of the time, up from 30% just three years ago.

Merchants are even using social media. Some log on to Facebook to make sure customers aren't crying identity theft to their credit card company while bragging to their friends about getting something for free.

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