1. It Runs In The Family Fraud
Your source for payments education
It Runs In The Family Fraud
Host: Lisa Tennant – SVP, Client Relations, Verifi
Brian Cullen – Sr Payments Risk Analyst, Sony
Robert Moran – Manager, Global Fraud Monitoring and Operations, Sony
Jennifer Pedersen – VP, Manager of Deposit Operations, Webster Bank

2. A Brief History of Family Fraud
Family fraud has evolved as consumers move toward shared family accounts, and young people gain access to payment methods through their own devices.
Buying music streaming
In-app purchases
One-click purchases
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3. The rise of Friendly and Family Fraud
8 out of issuing banks allow in-app chargebacks
53% of issuers and 72% of merchants believe that it is too easy to dispute transactions.
Digital purchases - games & music. *
* Javelin Strategy & Research *
Trends Driving Payment Ease
Consumer Demand
Social Media Influencers
Technology Improvements
Regulation
8 out of 11 issuing banks allow in-app chargebacks
Source: news/banks-make-chargebacks-easier-to-initiate.php
More than half (53%) of issuers and 72% of merchants believe that it is too easy for customers to dispute transactions.
Source: Javelin Strategy & Research. The Chargeback Triangle
Friendly fraud is especially prevalent with digital purchases, such as games and music, accounting for as much as 75 percent of chargebacks with these items, according to Aite Group.
Assessing friendly fraud risk can be a challenge for issuers. While issuers claim to experience only half the rate of friendly fraud that merchants see (17% compared to 34%), this disagreement might arise from lack of visibility, rather than actual differences in friendly fraud rates.
Studies have found that 83% of convicted criminals are repeat offenders, averaging five additional offenses each. Friendly fraudsters will likely follow this same path, requesting one illegitimate chargeback after another.
Source:
Issuers claim to experience only half the rate of friendly fraud that merchants see – 17% compared to 34%
Friendly fraudsters will likely become repeat offenders, requesting one illegitimate chargeback after another.
* Javelin Strategy & Research *

4. What are we seeing today?
How do merchants identify family fraud?
Do merchants have practices in place to mitigate and prevent this type of fraud?
Do Issuers see the same obstacles in mitigating and preventing these disputes?
How do merchants and issuers see consumer trends driving the levels of family fraud? Are cardholders more likely to chargeback?
What provisions do merchants and issuers think that the card brands should take to help reduce family fraud?

5. The Trade-off One-click payments In-app purchases Social Media
Customer experience versus reduced fraud – what is the optimal solution?
Customer experience versus reduced fraud – what is the optimal solution?
One-click payments
In-App purchases as part of gaming experience
Social media apps (buying through Instagram)
One-click payments
In-app purchases
Social Media

6. The Future
Driving towards a regulated market increases the need for industry collaboration to succeed
As we move to a more regulated global market for payments, how will SCA affect in-app purchases, or what should be in place to meet the exception criteria?
What mitigation strategies should merchants and issuers put in place? Eg, collaborative technologies, fraud filters, two factor auth, etc.
Regulated Markets – PSD2 & SCA
Industry Collaboration

7. Thank you Don’t forget to submit your session evaluation!
Host: Lisa Tennant – SVP, Client Relations, Verifi
Brian Cullen – Global Fraud Management, Sony
Jennifer Pedersen – VP, Manager of Deposit Operations, Webster Bank
Robert Moran – Manager, Global Fraud Monitoring and Operations, Sony