How to Prevent Friendly Fraud

Friendly fraud refers to theft that is perpetuated by unscrupulous individuals in hot pursuit of a "freebie" that they are not entitled to through theft and deception. However, despite the name, the methods used are far from being friendly. A friendly fraudster will typically conclude an online transaction, receive the goods they ordered and then promptly call the company to demand their money back, claiming the goods never arrived, or that their credit card was stolen and used without their consent. What can you do to prevent so-called friendly fraud?

Get a Signature

It is difficult to know for sure if a customer has a genuine cause for complaint or if they are trying to pull the wool over your eyes if the goods are left at an address. Even if the products arrived and were delivered to the correct address, thieves who are scouring the area can easily steal packages left on a person's doorstep before they come home from work.

Make sure you get a signature so that packages and other goods are fully accounted for when they are delivered, rather than left on a doorstep when no one is at home to receive them. A signature offers a guarantee that can prevent a fraudster from claiming later on that they did not receive their product.

Call Their Bluff

A friendly fraudster is unlikely to have thought through their actions clearly. As far as they are concerned, once they have complained that they never received the goods they ordered or that their credit card was used without their knowledge, they will be issued with an automatic refund, no questions asked.

But if you suspect that your company has been duped, call the fraudster's bluff. Listen carefully as they relate their version of events, and then encourage them to call their credit card company, as the card will need to be deactivated. If the customer has genuinely had their identity compromised by an identity thief, as they claim, they will be quick to follow through with your suggestions and take whatever necessary steps they can to safeguard their identity, and then call you right back. But a fraudster is likely to give up if you let them know that you will not issue a refund until they can supply further evidence of identity theft or fraud.

Friendly fraud can be hard to prove. While many customers who call in with a complaint are genuine victims, there are many others who are simply trying to get something for nothing, even if that means lying and stealing. Taking precautionary steps to prevent friendly fraud can help prevent thieves from getting away with it.