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Choosing a Friendly Fraud Solutions Provider? Look for These 5 Things!

Nicholas Robbins | Monday, February 6th, 2023 | 9 minutes

Friendly fraud is anything but friendly. Often considered a type of first-party fraud, friendly fraud occurs when a buyer chooses to file a chargeback without a valid reason. This could be an attempt to get goods or services for free or a legitimate mistake from a buyer who forgot they made a purchase.

Failing to fight friendly fraud means giving up product and revenue. Each chargeback fee adds up, eventually resulting in enrollment in chargeback monitoring programs or worse. Excessive chargebacks can ultimately lead to the closure of your merchant account. Knowing what to look for in a solutions provider can stop cases of friendly fraud eating into your bottom line, threatening your accounts, and eroding customer relationships.

Comprehensive fraud detection and prevention systems
Proactive dispute resolution and management
Seamless integration and reliable support
In-depth analytics and insightful reporting
Customization and flexibility

1. Comprehensive fraud detection and prevention systems

Tools from your solutions partner should provide the resources needed to combat friendly fraud. Customization is key for maximum return on investment (ROI). Ask about the following elements when you’re looking for solutions to help prevent many forms of first-party fraud.

Real-time monitoring: Continuous monitoring delivers near-instant detection of unusual patterns and discrepancies that could indicate friendly fraud, triggering rapid responses.
Advanced automation: Effective automation replaces time-consuming tasks and provides exceptional accuracy.
Comprehensive coverage: Preventing friendly fraud requires bringing together knowledge, experience, and technology to create a comprehensive strategy for protection.

Ask about the level of oversight you keep, and how you can manage solutions to optimize effectiveness and maximize returns. Ask how the tools available offer protection specific to your industry and the challenges of your business.

2. Proactive dispute resolution and management

Top solutions providers also provide systems that help you quickly and effectively manage incoming chargebacks and disputes. Effective management protects your chargeback ratio and merchant accounts. With the right tools and responses, you won’t take a hit just because a customer requests a chargeback.

Early dispute detection: Real-time order validation gives you the ability to manage first-party fraud disputes before they become chargebacks by receiving inquiries and responding near-instantly.
Effective communication: Solutions should simplify communication between merchants, issuing banks, and even customers. Strong communication helps resolve each customer dispute quickly — clarifying misunderstandings and rectifying claims.
Collaborative networks: The best bring this all together through collaborative networks that share data to resolve disputes and prevent chargebacks. Communication flows much better when providers integrate directly with tools like Verifi and Ethoca to deliver quicker, more effective resolutions.

Ask the provider if dispute resolution tools are integrated with their fraud solution. Direct integration means you don't have to manage more than one system to resolve disputes and fight fraud.

3. Seamless integration and reliable support

Disruption and downtime are revenue killers that can have lasting effects. As new threats emerge or your business updates its solutions, you’ll want a solutions partner that is always available and can minimize interruption. Check for these elements when evaluating fraud solutions — there’s really no need to adjust your whole workflow.

Ease of integration: Chargeback management tools should integrate seamlessly with your existing payment processing and ecommerce platform setup. Effective integration means you can get up and running quickly with near instant results.
Comprehensive support: End-to-end support, from demonstration to installation through the life of the partnership remains critical. Your provider should be available for customer service, technical assistance, and educational resources at all times.
Developer-friendly tools: Streamlined web consoles make it easy to manage your systems at a glance. The top friendly fraud protection solutions provide a user-friendly dashboard that lets you monitor and adjust protections as needed.

Ask about what it takes to fully integrate a chargeback management solution. How quickly will it be up and running? And once the system is working, how often are updates made? Is there ongoing support available whenever you need it?

4. In-depth analytics and insightful reporting

Most of your interactions after installation will focus more on your company’s day-to-day operations, especially with an automated and intuitive system in place. Look to your dashboard and reporting tools for insight on how to prevent future friendly fraud chargebacks. Minor changes made early can help thwart emerging threats. Ask about solutions with forward-looking features.

Detailed analytics: Analytics help you drill down into the data to discover the patterns and causes of disputes.
Actionable reporting: Effective systems also compile those analytics into actionable reports to inform your next steps.
Consumer insights: The best solutions providers offer consumer insights that help you better understand your customers and more easily identify risks.

Ask about the depth and complexity of reporting features. Can you quickly find the information you need? Are reports easy to read and understand?

5. Customization and flexibility

Autonomy is critical. No one knows your business as well as you. As your company grows, you’re going to want to continue to tweak the solution to fit evolving needs.

Customizable alerts: Quick notification of questionable activity helps you make the necessary adjustments to prevent friendly fraud before it starts.
Scalable systems: Flexibility requires that there’s no one-size-fits-all solution. Your fraud prevention must grow with your business.
Custom configuration: Pick and choose the tools that best fit the needs of your business. Combine customization with seamless integration for a comprehensive and flexible solution.

Ask about additional integrated solutions. Friendly fraud is more than just chargebacks. Inquire about identity verification and account protection. Seek to create a comprehensive solution to tackle emerging threats.

Ready to learn more about customizing friendly fraud solutions? We can help!

Kount has a wealth of experience helping businesses create and manage customized friendly fraud solutions that deliver exceptional results. Choosing the right solutions provider for handling friendly fraud is a critical step towards securing your company against a host of ever-changing threats.

Working with the best lets you focus on what matters most, growing your business and delivering excellent customer service. Satisfied, informed customers have much less chance of disputing the charge or committing friendly fraud. Strong solutions transform challenges like friendly fraud into opportunities for building better relationships while thwarting fraudsters.

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