What is a Chargeback Scam?
A chargeback Scam is also recognized as a friendly scam. When consumers buy an object or service online with their credit card, it demands a chargeback from the issuer’s bank after purchasing goods or services. Once approved, the chargeback cancels the financial transactions, and the consumer gets a refund of the money they expend. When a chargeback occurs, the merchant is responsible, regardless of whatever measures they took to verify the transaction.
Chargeback Scams
Friendly fraud has been spread out on the Internet, impacting both the sale of physical objects and online transactions. While dealing with online transaction fraud, prepaid cards are a compelling alternative to ensuring customer reimbursement. Software developers from South Korea, such as Nexon, utilized prepaid methodology in 2007 to fight this fraud. The prepaid cards were sold in stores such as Target.
Another instance is where MasterCard was filed against in 2003 by an online vendor for operating with credit card policies and charges that have made online vendors exceedingly terrible targets of this scam. Internet vendors generally have to pay much of the losses when a fraudulent transaction like friendly fraud occurs.
In recent times, a new type of fraud involving bank transfers instead of credit card payments has been documented in Europe. SEPA credit transfers can be recalled within ten working days of settlement by the payer’s bank. Some banks’ lax handling of SEPA SCT Recall requests has allowed some payers to identify bank transfers fraudulently after receiving the payee’s goods or services.
Call Centers For Fraud
There are dedicated call centres that operate entirely, intending to administer chargeback scams. Through emails, telephones and other mediums, scammers use different tricks and tactics. They are also applicable to credit card-based payments and digital purchases, and physical goods. Anyone can be an easy target with a group of scammers working to fool around.
