So-Called 'Friendly Fraud' On The Rise
from the what's-so-friendly-about-it? dept
Credit-card companies are looking to new technology to help them cut down on fraudulent purchases, but online retailers are looking at a slightly different problem. They say that "friendly fraud" -- when a customer purchases an item, then later disputes the purchase -- is on the rise. It's not clear exactly what's "friendly" about this kind of fraud, but it usually entails a customer ordering an item, then saying they never received it, or claiming they were sent the wrong item. Travel site Expedia says it runs into the same problem, with people purchasing travel services, then claiming -- after they've taken the trip -- that they never made the purchases. The companies are getting a bit wiser, doing things like taking photos of shipments before they're sent out, and it sounds like most people back off their claims once they're presented with some evidence of just how easy they are to debunk. The retailers cited by the WSJ seem to be saying that this is a manifestation of buyer's remorse, with people looking for a way out from credit-card purchases they've made, but that seems pretty generous. It's a little odd, since it sounds like they try to handle this stuff pretty gingerly and not upset the customers by accusing them of fraud and theft, and then using the "friendly" moniker. Friendly or not, fraud's a growing problem for online retailers and credit-card companies.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: fraud, friendly fraud
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Re: registered post
Not true. My wife, who sells stuff on ebay every so often, was bitten by this tactic. Paypal, which accepts CCs, did nothing to correct the situation despite all the information proving the buyer did make the purchase.
According to Paypal, the buyer stated the CC used in the transaction was done so without authorization, so they had no choice but to retract the funds.
For a seller, there is absolutely no protection against this.
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A pic of my empty mailbox would be a good counter claim then?
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Yup, the Anderson Effect at work.
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Stuff often gets dropped off without a signature. Once I had an expensive package delivered that was "dropped off", but wasn't there when I got home. As I recall though it was the delivery service that got charged for that one.
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Ebay Kingdom is a land of thiefs.
Thats how to buy anything for free on Ebay.
Make an account buy anything, pay for it, wait two weeks or more, obviously, report the item as not recieved and you'll get your money back in a week or two.
As an Ebay seller this happens to me all the time, I am in theory funding Paypals Buyers protection scheme as its my money that they use to 'protect the client money with' and it is I who takes the losses, they dont loose a penny, making Paypal/Ebay the mafia Godfather of their kingdom of thiefs.
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Re: Ebay Kingdom is a land of thiefs.
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Re: Ebay Kingdom is a land of thiefs.
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Friendly?
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The general public is more and more feeling that everything should be free, that with such success in turning the music business on it's ear, let's move along to airlines, hotels, and whatever we buy online. After all, the airline can't undo the flight, the hotel can't undo the stay, and online sellers for the most part can't prove you received anything.
Perhaps we could call this the "Anderson Effect".
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Real property is taken, and payment is retracted. The seller is deprived of the property and is not compensated. There is deliberate deception. This is a crime with an immediate victim who is out of pocket by virtue of the crime.
I know some, like you, may think that's the same as one friend lending another a CD to rip to MP3, but it is not. In the copyright case, nobody loses the use of a resource or real property by virtue of the friend ripping the disk.
The Anderson book, Free, is not referring to cases where real, scarce property is taken, and anybody who interprets it as such is either deliberately obfuscating his arguments, or dumb. I'd guess you are the former.
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Scamming someone on ebay isn't much different from jacking the lastest movie or hacking palin's email account, is it? Doubly so if the value of the goods is only a few hundred dollars coming from out of state, it's almost not worth the effort to try to get justice. Perfect scam.
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I'm willing to bet this is on the rise more than consumer fraud because this can be pretty profitable if only temporarily.
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The problem is, sometimes the company is wrong.
Actually the best one I had was done by ups (I assume). I ordered a 1200 baud "Volksmodem" (yes a long time ago). A beautiful box arrived. Upon opening the shipping box, the modem inside looked like it had been run over, literally. It was half the height it should have been. When I examined the shipping label, I found it had been peeled off, and taped on a new box. UPS made good, but I had no real proof of my innocence (except my complaint call coming in 1 hour after receipt). This kind of crime really hurts everybody, not just the shipper.
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Unfortunately I think it's more of a sign of our times than cases of buyer remorse. There has been a decline in moral standards, and people will attempt to say and do anything to steal goods or services or cash from other people if they think that they can get away with it.
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Granted neither is the correct way of going about things, but I can still understand where many of these people are coming from. 2 years ago my company severely cut our health benefits, without cutting the amount we have to pay them to get those helth benefits (it actually went up) costing me between $5,000 - $10,000 more per year in health related expenses. Although I would never steal anything beyond a few pens accidentally taken home, how many people would feel bad about ripping off the company for $1,000? $2,000? You can see where some people could justify this in their heads.
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Who're the Real Fraudsters?
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This "friendly fraud" happened to me:
I sell digital goods online, using PayPal. The customer orders from my website, is given a download link, downloads the item, and everyone's happy. In the rare cases when the customer does not receive a download link, they contact me and I work with them to make it right. In the very rare cases when I can't please a customer, I'll issue a refund.
However, a few months after ordering a product, a customer filed a chargeback at PayPal, even skipping PayPal's own rules about how a customer should work with a seller before filing a chargeback. PayPal never told me the reason- all I saw was a line saying "Reason: Code 120". The customer never talked to me about any issues he had with the product.
PayPal, almost as expected, gave the money back to the customer since it was a digital product without any "proof of shipping": I couldn't prove the customer received the product and he couldn't prove he didn't receive it.
The only conclusion is that this customer wanted some free money by filing a chargeback.
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EXPEDIA is a scam
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So true
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credit card Companies are in on it
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Friendly Fraud Prevention and Deterrence
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friendly fraud
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Friendly Fraud
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