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Education

Online games – easy targets for Friendly fraud

Friendly fraud is a result
fraud, chargebacks of children using their
parents' credit cards to
By Suresh Dakshina make unauthorized on-
which
purchases,
line
Chargeback Gurus result in purchases for
which the parents then
ecently, online games have experienced a rash of fraud-related incidents. make chargeback claims.
Specifically, Facebook allegedly allowed and encouraged friendly fraud with Friendly fraud also oc-
games it hosts, and the wildly popular online game Fortnite has been used by curs when cardholders are
R criminals as a platform for a variety of fraudulent activities. well aware of the transac-
tions and yet file disputes
As it turns out, online game are targeted by cybercriminals because of the nature of the with their issuing banks to
payment systems within these games, which give easy opportunities for a variety of fraud scam the merchants. The
practices, including account takeovers, friendly fraud, card testing and true fraud that can dark side of friendly fraud
result in a crippling number of chargeback claims. is that software tools and
artificial intelligence are
Account takeovers not capable of predicting

Some users have the most basic password credentials, and those accounts are easy targets human emotions and in-
for hackers. As a result, the real account holders see that their in-game credits are being tentions when a transac-
used and purchases are being made, which then turn into chargeback disputes. This is a tion happens online.
major reason why you see chargebacks on the rise for these kinds of systems.
Preventing friendly
Preventing account takeovers: Right now many games, including Fortnite, offer two- fraud: Creating a black-
factor authentication, but unless it is mandatory, a large number of account users list database to filter the
will chose convenience over security and use single-factor authentication. Normally, bad players will help
companies want to make it easier to login and play, so they often only require eight gaming companies re-
digit passwords, which can be hacked in minutes by any professional hacker. So duce their friendly fraud
requiring 12 to 16 character passwords and two-factor authentication will be positive chargebacks. It has been
steps to reduce account takeover fraud. estimated that those
who perpetrate friendly
fraud will repeat such
frauds at least three
times if merchants do
not take any action in
/USAePay preventing them in the
/USAePay
future. Also, internal is-
sues such as poor cus-
tomer service or decep-
SMARTER SOLUTIONS tive practices can lead
to friendly fraud charge-
FOR SECURE PAYMENTS backs. Merchants must
analyze these charge-
backs closer to know
Ecommerce their root cause.
Retail Card testing
Online games are particu-
WELCOME
larly good targets for card
Mobile testing fraud because so
many in-game purchases
are in very small amounts
– one- or two-dollar incre-
www.USAePay.com 866.490.0042
ments. Typically, a thief
gains access to a stolen

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