In a sign of the hard times, more consumers are trying to swindle their credit card companies. Online merchants say they are fighting a surge of consumers attempting to get out of paying for their internet purchases.
There's a new trend where consumers buy items online and then tell their credit card company that they didn't authorize the charge to get out of paying. It’s called “friendly fraud.”
Several online companies have reported a spike in friendly fraud during recent months. The travel website expedia.com is being ripped off by consumers who buy non-refundable tickets or trips, then claim they never authorized the purchase.
Often companies are stuck with the costs after such incidents.
“They'll look for a way to work the system and now they found credit card fraud as a means to do it,” said Tom Bartholomy with the BBB.
Bartholomy said what allows consumers to dispute credit card purchases and get them taken off their bill is the "chargeback provision" law.
“It's on the back of every credit card statement that you get what your chargeback rights are. And so consumers are taking advantage of that in an unethical way by claiming ‘oh I never received that or that wasn't my purchase when in fact it is. They're just trying to get one over on the banks and credit card companies.”
Merchants are getting wiser and asking for more information, especially if there's a shipping address different from the billing address.
Also, banks and credit card companies are aggressively investigating and denying more claims.
In some cases, they're getting the FBI involved and prosecuting individuals.
Bartholomy said it will now be harder for consumers with legitimate chargeback claims.
“You need documentation and if it’s not your bill, you're going to be asked to prove that it’s not your bill that you didn't receive this,” he said.