Facts About Online Casino Chargebacks Uk

What was your professional background before co-founding Global Risk Technologies, parent company of Chargebacks911?

The time limit for a chargeback request is either 90 or 120 days. Online casino chargebacks are made under the code “4855”, and the time limit for them is 120 days. In other words, you have 4 months to make an online casino chargeback and this period starts with the day of the transaction. Mar 04, 2016  Chargebacks911 CEO interview: Chargeback fraud is a big deal in the gaming industry Gary Cardone, founder and CEO of fraud, risk management and loss prevention company Chargebacks911, talks about how the issue of chargeback fraud affects the gambling industry and why it needs to be addressed. Do Online Gamblers Really Have to Pay? Basically, anyone can chargeback transactions for any of the following reasons. Gambling911 is an independent information service not affiliated with.

I’m not originally from the payments industry. I actually spent 25 years trading with the most volatile commodities on this planet – natural gas and electricity. I spent 15 years in the US helping reform and build markets. I was then in the UK from 1992 to 2002 working with both the electric regulator and natural gas regulator to make the markets over here work properly.
What was behind your decision to create Global Risk Technologies?
In 2007, my now COO dragged me to an internet show. I spent four days there and the parallels I saw between the online marketplace and what I had done for the previous 25 years were unbelievable. We just built this construct and we did a test where we took a product and white-labelled the branded product. We said: “Which one of these is going to sell more?” I did not know what a payment processor was or what a checkout page was. I didn’t know anything about payments at all. We sold $1.2m-worth in 90 days. This is from someone who didn’t know anything about the online market. People tell me it’s really difficult to make a living. This was in 2007 at the very bottom of the worst recession the UK and the US had seen in a long time. No one that is instrumental in building payments ever assumed that the online marketplace in 2015 would be 7.8% of all commerce on this planet, worth trillions of dollars.

We have shown through research that when a consumer does this and gets away with it, whether it’s a mistake or not, they are 50% more likely to do it again within 90 daysGary Cardone

How closely are you currently working with the real-money online gambling industry?
Some of our business is with gamers. We were at the ICE Totally Gaming show this year. We started developing our products for technology in 2009. We went live in 2011 and we started in a number of different verticals. As we have become more diverse and moved up the retail value chain, we are yet to find a vertical that doesn’t have a substantial problem. It is staggering. Every vertical has this problem. It doesn’t matter if it’s digital or physical. Whether it’s Amazon, Microsoft, Marks & Spencer, John Lewis, whatever brand you have, they are having fraud problems, because their online business is growing. If a consumer will file a $2 chargeback against Apple or iTunes and they claim it’s fraud, they’ll definitely do it for a $200 loss with a gaming site.
How does chargeback fraud apply to the gambling industry?
Issuing banks sometimes make mistakes. They have a consumer call up and say: “I’ve got a charge here that shows I paid x, y and z gaming companies.” The thing is the wife made the phone call. Her husband was out of town and she didn’t know he placed a bet last night. He lost £600 and she didn’t know about it. When she calls NatWest, for example, what is the person at NatWest supposed to do? This is an £8 per hour person who has been told to take care of depository accounts and says they will take care of the charge, no problem. We have shown through research that when a consumer does this and gets away with it, whether it’s a mistake or not, they are 50% more likely to do it again within 90 days. They don’t know there are penalties associated with this.
How exactly does the process of reclaiming chargebacks work?
I’d have to kill you if I told you that. There is a way to prevent these problems and then there’s remediation. If it’s a fraudulently-claimed file or dispute, there is a way for the merchant to get their money back. They’ve got to prove their case though and the problem with the online gaming market is that many merchants look at it and think they can’t prove anything, because it’s digital. This is a great myth in the payments industry.

Facts About Online Casino Chargebacks Uk Free

What more can banks and gaming operators be doing to prevent the problem of chargeback fraud?
I don’t know anyone that doesn’t defend something when it is taken from them. Over the last decade, with nearly every vertical in payments, it has been the status quo to not fight chargeback disputes, because it’s a cost of doing business. Chargebacks are up 155% for the last four years and 41% in the last two years. We think the number of dollars paid out exceeds $200bn a year. It’s a massive problem. First off, you have to become compliant. Compliance is not having a fraud-filter on. Compliance is doing what you said you were going to do. Once the merchant has become compliant, why would he put up with friction from a system that has huge inefficiencies in it? If we are currently having this level of friction with 1.3 billion consumers, what is going to happen when we have 7.3 billion consumers? Gambling companies are telling me they are getting hit with fraud. You should ask them what kind of fraud it is. I asked a guy today: “How do you define fraud?” He couldn’t answer my question. The payments industry has not defined what fraud is. There’s real fraud, there’s soft fraud, there’s hard fraud. Let’s give these activities names and then once you give it a name, you will now be able to defend against it. When you just lumber it all into one bucket, you apply one or two tools to the same bucket and it doesn’t solve the problem. It’s like going to four different doctors with four different symptoms. They each give you medication, and a week later, you’re dead.

Chargeback fraud, also known as friendly fraud, occurs when a consumer makes an online shopping purchase with their own credit card, and then requests a chargeback from the issuing bank after receiving the purchased goods or services. Once approved, the chargeback cancels the financial transaction, and the consumer receives a refund of the money they spent. When a chargeback occurs, the merchant is accountable, regardless of whatever measures they took to verify the transaction.^[1]

• 2Overview

History[edit]

Friendly fraud has been widespread on the Internet, affecting both the sale of physical products and digital transactions. To combat digital transaction fraud, prepaid cards have been offered as an effective alternative to ensure customer payment. South Korean software developers such as Nexon implemented a prepaid system in 2007 to combat friendly fraud, selling prepaid cards in stores such as Target.^[2]

MasterCard was sued in 2003 by an Internet vendor for having credit card policies and fees that have made Internet vendors especially vulnerable targets of friendly fraud. Internet vendors typically have to pay much of the losses when a fraudulent transaction like friendly fraud occurs.^[3]

In recent years, a new variant of friendly fraud, involving bank transfers as opposed to credit card payments, has been documented in Europe. SEPA credit transfers can be recalled within 10 working days of settlement by the payer's bank.^[4] The lax handling of SEPA SCT Recall requests by some banks has allowed some payers to fraudulently recall bank transfers after having received goods or services from the payee.^[5]

Overview[edit]

Physical products[edit]

Online merchants who sell physical products cannot fully protect themselves. The only way to have concrete protection is to take an imprint of the card (and even with card readers/makers this can easily be duped), along with photo ID. That signature, in addition to information gathered online, can help in the resolution of chargeback disputes but contractually is no guarantee. Also, the merchant can request the card security code on the credit card to fight 'Card absent environment' or 'Card Not Present' (CNP) chargebacks. These are the three digit codes on the backs of Visa, MasterCard, and Discover cards, and the four digit code on the front of American Express cards.

Digital transactions[edit]

Friendly fraud thrives in the digital products market where it is much easier for fraudsters to succeed. Common targets include pornography and gambling websites.^[6] Attempts by the merchant to prove that the consumer received the purchased goods or services are difficult. Again, the use of card security codes can show that the cardholder (or, in the case of the three-digit security codes written on the backs of U.S credit cards, someone with physical possession of the card or at least knowledge of the number and the code) was present, but even the entry of a security code at purchase does not by itself prove that delivery was made, especially for online or via-telephone purchases where shipping occurs after finalization of the contract. Proof of delivery is often difficult, and when it cannot be provided, the cardholder gets the product without paying for it.

One method of combating friendly fraud is to create a feature in the product that checks in with the merchant's database. If a chargeback is issued, the merchant can tell the product to suspend service. This tactic will also work for digital subscription services or any other online product that requires updates or logins. The merchant will usually still be charged a fee for incurring a chargeback, so this is not a complete solution.

Call center transactions[edit]

Another common channel for chargebacks is mail order/telephone order (MOTO) payment processing through a call center. In this case, as with the two others listed here, the main problem is that this is a card not present transaction. To help eliminate call center purchase chargebacks, call centers are working to make the purchases more like 'card present' purchases.

When consumers walk into a store and buy something, they typically swipe their credit cards, confirm the purchase amount, enter a secret code (or sign their name) and leave with the merchandise. This is a 'card is present' purchase and fraudulent chargebacks in these situations are almost non-existent.

Agent-assisted automation technology is available for call centers that allows customers to enter their credit card information, including the card security code directly into the customer relationship management software without the agent ever seeing or hearing it. The agent remains on the phone, so there is no awkward transfer to an interactive voice response system. All the agent can hear is monotones. This is the 'card present' equivalent of 'swiping' the card.

Before the purchase is submitted by the agent, the purchase amount is played back to the consumer along with the last four digits of the card. The consumer is asked to confirm their purchase by providing a verbal signature, which is recorded.

Finally, an email is sent to the consumer with the purchase information and an attached audio file of their verbal signature.

Cost to Merchants[edit]

A 2016 study by LexisNexis stated that chargeback fraud costs merchants $2.40 for every $1 lost. This is because of product-loss, banking fines, penalties and administrative costs.^[7] A 2018 study by the Aite Group on charge back costs, stated that U.S. CNP fraud losses for 2017 were $4 billion and estimated that by 2020 they would rise to $6.4 billion.^[8]

Prevention Methods[edit]

The proliferation of online payment methods, including mobile apps, and the increasing sophistication of the fraudulent actors, including bots, have made the task of detecting and preventing CBF, particularly online CBF, more complex. According to a 2018 Gartner report on online fraud, retailers are increasingly turning to machine-learning based (or AI) fraud prevention system to make rapid, effective risk decisions.^[9]

References[edit]

1. ^Poole, Riley (January 5, 2008). 'Understanding Friendly Fraud'. Merchant Talk.Missing or empty |url= (help)
2. ^Sheffield, Brandon (September 7, 2007). 'Nexon's Min Kim On The Power Of Microtransactions'. Gamasutra.
3. ^Bayot, Ruben (May 13, 2003). 'Company Sues MasterCard Over Fees for Online Sales'. New York Times.
4. ^As an example, UK building society Nationwide notes under 'Important Information' that 'A payer can recall a SEPA Credit Transfer within 10 working days of it being paid into your account. If this happens we'll deduct the SEPA Credit Transfer from your account.', 'All about SEPA Payments'. Archived from the original on 2017-10-26. Retrieved 2017-10-25.
5. ^Yang, Maximilian (September 1, 2016). 'Card Payments and Consumer Protection in Germany'(PDF). Anglo-German Law Journal. Archived from the original(PDF) on July 5, 2017. Retrieved October 25, 2017.
6. ^Ritchtell, Matt; John Schwartz (November 18, 2002). 'Credit Cards Seek New Fees on Web's Demimonde'. New York Times.
7. ^'2016 LexisNexis® True Cost of Fraud 7 SM Study'(PDF). LexisNexis. Retrieved 2016-05-01.
8. ^Conroy, Julie (November 15, 2018). 'The Global Chargeback Landscape'. aitegroup.com. Aite Group LLC.
9. ^Care, Jonathan; Phillips, Tricia (January 31, 2018). 'Market Guide for Online Fraud Detection'. gartner.com. Gartner, LLC. Retrieved 3 January 2019.

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