What is accidental friendly fraud?

Friendly fraud occurs when legitimate cardholders dispute charges they actually authorized. Unlike true fraud (where criminals use stolen cards), these disputes come from your actual customers. “Accidental friendly fraud” happens when customers file disputes because they’re genuinely confused, not because they’re trying to get something for free. These cardholders believe they’re right to dispute a charge that was actually legitimate.

These disputes typically emerge from scenarios like:

• Confusing billing descriptors: A customer sees “GLOBALPMTSYS-9284” on their statement and doesn’t recognize it as your business name.
• Forgotten subscriptions: Someone signed up for a streaming service years ago, forgets about it, then disputes the “unknown” recurring charge when they finally notice it.
• Household purchases: A spouse orders your product while the primary cardholder is unaware, leading to a “suspicious activity” report when the statement arrives.
• Refund timing issues: A customer requests a refund, grows impatient after a few days, and files a dispute shortly before your refund actually processes.

What makes these situations distinct is that they involve genuine confusion rather than deliberate deception – customers who would likely never have disputed had they simply understood what they were seeing on their statement.

Accidental vs deliberate fraud in chargebacks

Not all friendly fraud happens by accident. Merchants face three distinct fraud types that need different handling methods:

Accidental Friendly Fraud: These are legitimate customers disputing charges due to genuine confusion without fraudulent intent.

Deliberate Friendly Fraud (Chargeback Fraud): This involves cardholders intentionally filing false disputes to get products for free or due to buyer’s remorse. This is essentially theft through the payments system—customers knowingly taking advantage of the chargeback process.

True Fraud (Third-Party Fraud): Classic criminal fraud where someone other than the authorized cardholder makes a purchase using stolen credentials. The cardholder is a genuine victim.

What the distinction means for merchants

All three fraud types lead to the same initial outcome – a chargeback resulting in lost revenue, merchandise, and additional fees. Most merchants find that a significant portion of chargebacks come from invalid claims.

The challenge? Reason codes don’t tell the whole story. A chargeback labeled “Transaction Unauthorized” could be any of the three fraud types. A customer might not recognize your billing descriptor and report fraud when no actual fraud occurred.

Misidentifying fraud types costs you money. Treating friendly fraud as true fraud means giving up recoverable revenue. Treating true fraud victims as friendly fraudsters damages customer relationships and wastes resources.

Getting the classification right protects your business. Too many chargebacks can affect your merchant accounts, while not fighting friendly fraud can encourage repeat behavior. Responding appropriately to each type of fraud helps safeguard your revenue and maintain good standing with payment processors.

Preventing accidental friendly fraud

Accidental friendly fraud isn’t about customers trying to game you—it’s about confusion meeting a dispute button. When customers hit “I don’t recognize this charge,” they’re genuinely puzzled, not being devious. The good news? You can prevent much of this confusion with smart, proactive communication. Here’s how to turn customer confusion into clarity:

• Make your billing descriptor recognizable: That cryptic “PMTSYS-9284” on a statement might as well be hieroglyphics. Nearly 60% of cardholders dispute charges simply because they don’t recognize them. Use clear identifiers like   your web shop’s URL instead. Add a contact number too. A clear descriptor is your first defense against disputes.
• Connect the dots in the customer journey: From purchase confirmation to shipping update to delivery notice—each communication reinforces the legitimate transaction. Include order details in every message, like breadcrumbs leading customers back to “Oh right, I did order that!”
• Be transparent about refunds: The refund waiting game creates impatient customers who may file disputes. Process refunds quickly and communicate their status. Simple “refund initiated” and “refund complete” notifications prevent customers from disputing while your refund is still processing.
• Send billing reminders: For subscriptions, a heads-up 3-7 days before billing works wonders: “Your annual Premium membership ($99) renews on May 15th. No action needed to continue your benefits.” This prevents the common “I forgot I signed up for this” dispute.
• Document delivery: Provide tracking numbers and require signatures for high-value items. When a customer claims they never received an order, having delivery confirmation ready prevents disputes and demonstrates good service.

Handling chargebacks from accidental friendly fraud

A customer hit the dispute button despite your prevention efforts. Don’t panic! Accidental friendly fraud cases are often your most winnable chargebacks—when you know how to connect the dots for confused cardholders.

Look beyond the reason code. When a dispute notification arrives, investigate the real situation:

• That Visa 10.4 code or Mastercard’s “no authorization” might simply mean “I don’t recognize GLOBALPMTSYS-9284 on my statement”
• Check their history – loyal customers rarely dispute charges without reason
• Notice if they’re still using your service while claiming they never ordered it
• Review the timing – many customers file disputes shortly after requesting refunds, showing impatience rather than fraud

For instance, when a customer disputes a subscription as “unauthorized,” but your logs show recent activity, you’re likely dealing with a forgotten subscription or confusing billing descriptor.

Sometimes direct outreach works best. This is especially true when it’s a loyal customer’s first dispute, and the evidence suggests genuine confusion. A simple explanation like “That TECHSVC-GLOBAL charge is your annual cloud backup” can resolve confusion faster than the formal dispute process.

Fight Chargebacks More Effectively with Justt

In many cases, you’ll have no choice but to dispute chargebacks that start from accidental friendly fraud as part of your broader revenue recovery strategy.

Handling chargebacks can quickly becomes overwhelming. Between confusing reason codes, specific evidence requirements, and tight deadlines, the challenge multiplies as your transaction volume grows.

Justt’s fully automated platform makes this headache disappear. Our AI-powered technology creates customized evidence documents for each dispute, addressing the unique details of every case. This precision significantly boosts win rates across all chargeback types.

We connect to over 500 data points, automatically pulling the most compelling information from your PSP, third-party sources, and your own systems. You’ll never miss important evidence or deadlines—even during your busiest seasons.

Ready to transform your chargeback response? Talk to our experts today.