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Education
ChapterTitle

StreetSmarts SM

Friendly fraud, familiar fraud

By Nick Cucci People who commit friendly fraud, are essentially stealing
Fluid Pay LLC from the company they place purchases with. These
individuals will place orders, receive the promised goods
lthough no one wants to be a victim of fraud, or services, and then dispute the charges with their credit
the reality is that a majority of people will card company.
end up as victims of this crime at some point.
A New fraud techniques are surfacing every day, To protect their customers when a chargeback occurs,
which is contributing to a recent spike in friendly fraud banks that issue cards to customers (issuing banks) will
that is impacting businesses. dispute the charges themselves and claw the money back
from the company in question. This can occur even when
In this article, I'll discuss fraud, particularly friendly friendly fraud is involved. In many cases, this form of
fraud and familiar fraud. I'll explain what these types of fraud is perpetrated by someone in the household making
fraud are and how they work. a purchase without the cardholder's knowledge. In this
case, the unwitting cardholder disputing the charge
According to Investopedia, http://tinyurl.com/2bf7j8hk, believes the chargeback is justified.
fraud is a criminal act that involves stealing personal What is familiar fraud?
information, money and other valuable items for nefarious
purposes. Those who commit fraud typically do so with Throughout the years, friendly fraud has also been used
the intent of skirting laws, stealing money or receiving to describe familiar or family fraud (see http://tinyurl.com/
free items that they are not entitled to. mr2r5emw). Familiar fraud is a type of family fraud that
occurs when a person's friend, relative or someone else
Fraud comes in many forms, ranging from stealing they know steals their personal information for illegal
someone's credit card and using it to make purchases to use. Most commonly, the information is stolen to make
creating an account for a fake individual with the express unauthorized purchases (as described above). However, it
purpose of tricking people into donating funds to the can also be used to sign up for bank accounts, open new
account credit lines, receive loans, or even sign up for phone or
insurance plans.
What is friendly fraud?
Who commits friendly fraud?
In the payments business "friendly fraud" commonly
refers to the act of illegally requesting chargebacks (see Those who perpetuate friendly fraud all have one thing in
http://tinyurl.com/22tcrkph). This type of fraud is anything common: they are committing a crime. However, outside
but "friendly" because it is being perpetrated by the people of that one connection, they can often vary widely. While
companies value the most—their customers. it is true that friendly fraud is most commonly commit-

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