Global Risk Technologies’ (GRT) Chargebacks911 business is waging an educational campaign to enlighten merchants in understanding and using reason codes in the light of newly released fraud statistics.
The figures from Financial Fraud Action UK reveal that financial fraud losses grew by 26% in 2015. The research further highlights the growth in payment card fraud, up 18% over the same period to £567.5m and the value of card-not-present (CNP) fraud, including ecommerce, which was up 20% to £398.2m.
Chargebacks911 has seen friendly fraud rise 150% since 2009, while chargebacks grew 55% in the same period. Part of the cost problem for merchants is that when they are hit by fraud they do not fully understand the reason codes reported back to them by the issuing bank.
Each card network, such as MasterCard or Visa, has its own unique set of chargeback reason codes, informing merchants of a host of reasons why they may have been hit with a chargeback, including:
• Merchandise or services not received
• Cancelled recurring transactions
• Counterfeit transactions
• Goods or services defective or not as described
Reason codes were first created as a valuable tool to help merchants understand chargeback management and analysis, but with the advent of friendly fraud, they have become less insightful. Payment networks often address consumer grievances differently, so Chargebacks911 prefers to categorise chargebacks for merchants by breaking it down to three main causes:
• Merchant error
• Criminal fraud
• Friendly fraud
Chargebacks911, a company of Global Risk Technologies, focuses on chargeback mitigation and risk management. It specializes in servicing Internet merchants and acquiring banks, offering dispute response solutions and deep analytics.
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