Chargeback Fraud and Credit Cards

Chargeback fraud is by where a customer orders online from a merchants store. The merchant then ships the item to the customer. In the meantime, the customer receives the product or services. Later the merchant realizes that they will never be paid or that the customer has decided to cancel the payment through their bank.

Other kinds of chargeback fraud can occur when someone has stolen a credit card and used it to buy goods and services online. Most chargeback fraud today occurs on the internet through online purchases.

Credit card processors have chargeback fraud protection built into their credit card processing system. Not all chargeback fraud can be stopped by any one credit card processing company but they do their best to keep the percentage of chargebacks for the merchants very low.

Is there insurance to cover chargeback fraud?

Yes, chargeback fraud insurance covers a merchant against cardholder fraud. This takes places when a cardholders credit card is used for a purchased and was not authorized. Usually because of phishing, credit card hijacking, identity theft or stolen credit cards.

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