How friendly fraud happens
Not all of it is dishonest, and the issuer usually cannot tell which kind it is. Common causes:
- A billing descriptor the cardholder does not recognise
- A purchase by a child or partner on a saved card
- A forgotten subscription renewal, or a free trial that converted
- Using the bank's dispute button instead of asking the merchant for a refund
- Buyer's remorse, or a delivery that was slow but did arrive
- Deliberate abuse: keeping the goods and claiming the money back
How the card schemes address friendly fraud
Both large schemes let merchants answer with proof of a prior relationship. Visa's Compelling Evidence 3.0, in effect since April 2023, makes a card-not-present fraud dispute invalid when earlier purchases by the same cardholder match on data such as device ID and IP address. Mastercard's First-Party Trust programme shifts liability for the dispute to the issuer when a merchant provides compelling evidence, and Mastercard's site says the programme has launched in the US.
Tools that show purchase details in the banking app, such as Order Insight and Ethoca Consumer Clarity, aim earlier, at the confusion that starts many of these disputes.
What reduces friendly fraud for a merchant
Clear descriptors, emailed receipts, easy cancellation and fast refunds remove the honest cases. For the rest, the defence is evidence: delivery confirmation, login and device records, usage logs for digital goods, and a history of earlier orders with no fraud reported.
Friendly fraud, true fraud or refund abuse?
- True fraud
- A criminal uses stolen card details, and the cardholder had no part in the purchase. Also called third-party fraud.
- Refund abuse
- False claims made to the merchant directly, such as an item not received, with no chargeback involved.
Where Friendly fraud shows up in a platform
Modules that do the work
- Fraud & riskReal-time fraud scoring, limits and case management, with the risk engines you already trust.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
- Compelling Evidence 3.0 overview and FAQ, read 13 October 2026 (Verifi, a Visa solution)
- First-Party Trust, product page, read 13 October 2026 (Mastercard Developers)
- Dispute management, overview page, read 13 October 2026 (Mastercard)
General information, not legal advice: what applies to you depends on your services and your market.