The Big Ouch: Fighting First Party Fraud!

A couple of years ago, I bought a six-inch sub from a takeaway restaurant and then quickly purchased another exact sub, only to accidentally/forgetfully deny the second transaction.

Unknowingly, I committed first party fraud and unfortunately, this is becoming quite a serious issue in our industry, as many consumers are “disputing transactions” quite knowingly!

Your classic examples are:

A consumer purchasing a product that they are not satisfied with, so they deny the transaction versus pursuing the grievance with the merchant.

Or the consumer pays for a trial subscription, forgets to cancel, and then holds their “card” responsible for the “grievance”.

And then, do not forget, if you apply the one throat to choke theory, it is much easier to deny the transaction with the financial institution.

We (many of my friends at different FIs) started exploring software and service solutions to solve this problem. Most of the platforms, in fact, almost every single one does not do a good job in covering the entire dispute lifecycle. And what is worse, is that most solutions create more work than the FI or even the consumer expected.

?My poor parents were accidentally charged for three items on one receipt – they had to fill out three dispute forms (30 minutes each) for each item even though they were all on one receipt.

And not to forget the poor employee at the FI who had to trudge through the muck. What was even more amazing was that my parents got credit for not three items but five items (two were credited twice) – so inefficiency abounds.

Would you join “us” (my FI friends) on a call this Friday, December 20th from 2 – 3 pm EST. Here is the link. The discussion is an open brainstorm.

And if you are looking to sign up for a solution, please put on the brakes, I will be happy to share our research.