August 24, 2016
Digital Subscriptions Top List of U.K. Sectors Vulnerable to Chargebacks
Feb. 1, 2016
Subscriptions for digital products suffered the highest chargeback rates in a recent survey of U.K. merchants by chargeback management service Global Risk Technologies. The company said it examined 50 million transactions in the health & beauty, diet, men’s, women’s and digital subscriptions sectors in the fourth quarter of 2015. It found chargebacks accounted for 24 percent of all digital subscription purchases in the U.K. during the holiday season, more than twice the rate of any other product category.
“Fraudsters are targeting vulnerabilities online that don’t exist in the card-present world,” said Monica Eaton-Cardone, CIO of Global Risk Technologies. “A staggering 86 percent of chargebacks are fraudulent and many consumers often bypass merchants to directly file complaints with card-issuing banks. In my opinion, chargebacks are generally a learned behavior. Most consumers do not intentionally attempt to get something for free the first time there is a dispute. However, once they profit from so-called friendly fraud, many are tempted to repeat fraudulent chargebacks.”