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Facebook’s friendly fraud shows cardholders must wise up

Monica Eaton-Cardone, CIO and co-founder of The Chargeback Company

As tech giant Facebook stands accused of knowlngly allowing underage consumers to unwittingly spend large amounts of cash on games, Monica Eaton-Cardone, CIO and co-founder of The Chargeback Company, an organisation that specialises in recovering money from chargebacks and fraud, said that banks and consumers must get wise to the risks.
“Facebook’s public perception has fluctuated drastically in recent years,” she observed. “Unfortunately for the social giant, another PR nightmare has hit. Internal emails have been made public which reveal somewhat ‘deceptive business practices’, according to the Federal Trade Commission.”
She said the emails unveil the company’s chargeback rate of 9%. For perspective, she pointed out, a rate of 0.1% is generally accepted, and many deem anything above 2% as dishonest.
“However, in defence of Facebook, we need to take into account where these chargebacks were coming from – children spending their parents’ money on online games,” she added. “Facebook is not the only company which will experience chargebacks of this kind – and it can’t simply reject the transaction because it was made from a child’s account. That’s because businesses receive more complaints from rejecting valid transactions than they do by accepting accidental ones. Not only is this now a completely average situation, but we expect ‘accidental’ transactions to grow as we move closer to the invisible checkout that consumers are becoming more acquainted to.”
The Chargeback Company recommends that banks, card schemes and regulatory bodies educate and advise cardholders about their accountability when shopping online.
“While it is not the cardholder’s fault – they haven’t been told otherwise – merchants cannot continue to take the blame for customers failing to read the small print, forgetting to ‘opt out’ of repeat subscriptions, or not monitoring their children’s online activities,” added Eaton-Cardone.

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