The chargeback process began as an antidote to true fraud. When a consumer had card information stolen, was a victim of identity theft, or when a fraudster opened fraudulent accounts in the consumer’s name, consumers were given the option of asking for a ‘chargeback,’ or a return of their monies.

The term ‘friendly fraud’ arose from actions a card holder took either on his/her own behalf or those of a family member in response to a suspicious charge. While these charges can often be attributed to a cardholder’s family members completing a charge without the cardholder’s knowledge, friendly fraud can also be a form of buyer’s remorse. This is where the line between ‘real’ and ‘friendly’ fraud becomes thinner.

Friendly fraud has exploded in recent years due to online shopping, the ease of receiving a chargeback from an issuing bank, and even Covid-19. The newest victims of friendly fraud are the already beleaguered restaurants managing to stay afloat during the pandemic. Curbside pick-up and delivery within the CNP space has exploded and fraudsters appear to have found a whole new outlet for friendly fraud: Claiming they never ordered or received their food and requesting a chargeback.