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#2256518 - 07/09/21 09:00 PM Authorized transaction / then claiming fraud
Tryin2Comply Offline
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Joined: Sep 2015
Posts: 17
Good afternoon - we have a scenario where we are seeing increased fraud disputes. Our fraud center places holds on transactions in question and once the customer authorizes/confirms the validity of the transaction releases them. We have seen an increase in customers claiming they didn't realize they were authorizing the transaction and now are returning to dispute the item. What have other financial institutions done in these types of cases?

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#2256532 - 07/09/21 10:49 PM Re: Authorized transaction / then claiming fraud Tryin2Comply
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,316
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I've heard of this and am not 100% sure there is a good answer, unless the bank is specific in its communication with the consumer describing the transfer and that they have the option to block it at that moment. If the consumer authorizes it specifically with transaction facts, I would decline a claim based on the specific authorization by the consumer. The claim is to determine if the transfer was done by the consumer, if they authorized someone else to do it, or benefitted from it. A thorough process getting approval establishes they authorized it, personally.

If there is doubt as to what is being asked - specifically, then the consumer has not agreed to anything specifically, and there is room for a claim as a consumer protection.
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AndyZ CRCM
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#2256582 - 07/12/21 06:55 PM Re: Authorized transaction / then claiming fraud Tryin2Comply
John Burnett Offline
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John Burnett
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Cape Cod
We get a lot of questions like this one, and they often involve a third-party security provider that contacts the cardholder for a suspect transaction. If that's who your "fraud department" is, work with that third party to better understand its routine and how it documents how a customer gives an authorization for a suspect transaction. You'll need the third party's document record to back up your denial of the customer's later claim that the transaction was not authorized.
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John S. Burnett
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#2256677 - 07/14/21 04:00 PM Re: Authorized transaction / then claiming fraud Tryin2Comply
Tryin2Comply Offline
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Joined: Sep 2015
Posts: 17
Thank you both for your guidance.

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