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Friendly fraud and how to prevent it

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Last editedAug 20222 min read

If your business trades online and takes payments from customers’ credit cards, there’s a very good chance you already know the term ‘friendly fraud’, sometimes referred to as first-party fraud. If you’re aware of friendly fraud but don’t know how to deal with it, or have yet to understand what it means, read this guide.

Here at GoCardless we take payment security extremely seriously and work closely with our clients to protect their customers and their business at the same time. Understanding how to deal with friendly fraud is just part of that protection.   

Friendly fraud meaning

Friendly fraud describes a situation when a customer has purchased goods or services from a merchant using a credit card, but subsequently contacts the card issuer to dispute the charge. It is perfectly possible for a dispute of this kind to be raised in a legitimate manner, of course, and for a chargeback to be made.

Friendly fraud describes the scenario when the reason for the dispute is untrue. In some cases, a customer might claim not to have received an item which did in fact arrive, or to be dissatisfied with an item which is perfectly fine. 

The difference between this and the more ‘traditional’ forms of credit card fraud is that no third party is involved. Another difference is that a ‘fraudulent’ claim could well be made for genuine reasons with no malice intended.    

How to prevent friendly fraud

Incidences of friendly fraud have risen in recent years in line with the rise in online commerce and card-not-present transactions. According to Expert Market, friendly fraud is increasing at a rate of around 41% every couple of years. This is clearly an issue which needs to be dealt with, and the fact that it is not always driven by malice in the other party shouldn’t lead to complacency.  

Some of the factors likely to lead to friendly fraud include the following:


If customers are confused over the status of an order or the steps to arrange a refund, they may well opt to raise a dispute with their card issuer. If delivery of an item doesn’t take place by the date the customer expected it to, for example, the customer may tell their card issuer that goods paid for haven’t been received. Similarly, if a customer has already asked for a refund, but feels that the payment has been unduly delayed, they may raise concerns with the card issuer.   


In some cases, different members of a family have access to a shared account with a merchant. This can mean that purchases are made and completed, only to later be queried by the main account holder. This happens particularly in those accounts which enable the younger members of a family – children and teenagers – to gain access. If they can make purchases without the prior approval or knowledge of the account holder, it could lead to problems.    

A change of heart

Perhaps the simplest cause to understand is that customers sometimes change their mind about a purchase, and contact the card issuer to get the money back. 

Friendly fraud prevention

There are several steps to lessen the chances of friendly fraud. These include opening up clear and easily accessed lines of communication with the customers, with Terms and Conditions clearly displayed at the time of purchase, and using email to send timely confirmations of goods being despatched, as well as enabling parcel tracking and sending confirmations of delivery.   

Clear communication should make it as easy as possible for customers to get in touch and request returns, while also as quickly as possible sharing details of any possible delays in delivery. 

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

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