There is still a “long way to go” in coping with the issue of chargeback fraud, according to Monica Eaton-Cardone, co-founder of Chargebacks911.
Chargeback fraud occurs when consumers use the chargeback process to secure a refund and illegitimately dispute the transaction with the bank rather than contacting the merchant.
In an exclusive interview with Specialist Banking, Monica believed that the issue was now more prevalent.
She claimed that chargebacks and disputes were growing much faster than transactions by percentage, and this was because the process had become more efficient.
“You’re educating customers and card holders about what they need to do [regarding chargebacks], [therefore], you're not going to get less disputes, you're going to get more.”
Chargebacks911 provides a solution for financial institutions, which includes rule audits, reviews and assessments for issuers and acquirers.
The company helps to guide these institutions to what changes need to be made in order to optimise efficiency.
Monica added that issuers and acquirers weren’t coping with the increase in disputes.
“What an issuer does to improve customer service is say, ‘Hey, you can call us anytime that you have a dispute, and [while] we used to resolve it in 30 days, now we'll give you a refund same-day.’
“Well, guess what, that ends up creating more chargebacks, not less.”
She explains that this could create more risk, which she claims is an “afterthought”.
“It's not a core competency within their business, which is where I think we come in.”
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