Tuesday Topic: Friendly Fraud

My opinion on Friendly Fraud, from my personal consumer experience, is that the merchants are often much more to blame for these friendly fraud cases than the consumer.  Consumers do most of their purchases online and are inundated with information from hundreds of sources that the busy human mind simply cannot keep track of - when merchants fail to effectively and honestly communicate in the transaction, the consumer is simply acting honestly based on the information they receive when they start the unauthorized transaction claim.  I have had multiple instances of two different purchase experiences where I wrongly believed the transactions were unauthorized.  The first described below was the charge information having some third-party processor name in the information that I had no knowledge of but nowhere showing the name of the merchant that I utilize.  The second described below is, in my opinion, shady merchants trying to lock in future purchases that they know you don't want.

The most recent experience that had occurred prior with other parties was with an annual auto-renew subscription to an online forum (FullSizeBronco.com) using my PayPal account.  I received no advance email from the forum about auto-renew and on the day the charge went through, I received the PayPal email stating a $19.99 payment to Verticalscope, Inc.  Every morning, I have 50-plus emails waiting for me and I start at the top of the Inbox and work down in dispatching them.  I immediately logged into my PayPal account to verify that the transaction did post, and the email was not a phishing attempt.  Seeing the strange transaction in my account from a company that I had never heard of, I then opened a fraud case with PayPal which was processed promptly and within 15 minutes was denied because they said it was authorized.  Knowing that I had never purchased anything from a company called Verticalscope, and had not purchased anything online in recent days, I then disconnected payment methods from my PayPal account as a required step before closing the account.  I proceeded to work down my Inbox emails and about 20 emails further down, I had an email renewal notice from FullSizeBronco.com stating the annual renewal charge of $19.99 - but not who the charge would be coming from.  Many other subscriptions that I have from economic and financial analyst providers are also annual renewals, but they send out emails several days in advance alerting the subscriber to the upcoming renewal and stating who the charge would be coming from and the amount to be charged.

The second type of experience I have had where I submitted a fraud case was on online purchases where there was apparently obscured small wording about automatic shipments which was not clearly stated that I missed, unlike terms that banks are forced to disclose to our customers with larger and bold font, and then sometime later I received an email of another charge which I knew nothing about - usually one to three months later.  These merchants then permanently lost me as a customer!