The 5 Stages of CNP Fraud

By Karisse Hendrick, Editor-at-Large,

Editor’s Note: In 1969, Swiss psychiatrist Elisabeth Kübler-Ross proposed to great acclaim that humans go through five separate stages when dealing emotionally with the loss of a loved one: denial, anger, bargaining, depression and acceptance. While the stakes aren’t nearly as high, in her former role advising merchants on their fraud issues,’s Karisse Hendrick noticed a comparable pattern. When CNP merchants identify for the first time that their company has become a target for fraudsters, it can be the start of an arduous process. By recognizing the pattern, companies hopefully will move through the process faster, reaching acceptance—and preventing future fraud losses—as efficiently as possible.

Stage 1: Denial

Usually, the first sentence a fraud consultant hears goes something like this: “We don’t have fraud, but we have been getting a lot of chargebacks recently,” or “my bank says we have fraud, but I think we just have customers who don’t want to pay their bills.”

While legitimate customers may file chargebacks out of remorse every once in a while, merchants that suddenly experience a high volume of fraud chargebacks within a few months probably are facing

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