‘Amiable Fraud’: The Rise of Chargeback Scams Hitting UK Businesses
Businesses across the UK have reported a rise in so-called “friendly fraud”, or chargeback scams, where customers tell their credit card companies they haven’t made the purchase listed on their statement, but actually, they have.
The customer receives a refund, and the seller is charged the same amount – plus an additional fee for the process.
One business owner in London said he was so frustrated by the impact it was having, that he started investigating the fraudulent claims himself.
A spokesperson for UK finance,which represents the banking industry,said: “Chargebacks are an critically important consumer protection. Unfortunately, there are cases where consumers make false claims.
Restaurant Owner Confronts Customers Over Chargebacks After Losing Hundreds
A restaurant owner is warning others about the growing issue of fraudulent chargebacks, after taking drastic measures to recover lost funds. The owner, who wished to remain anonymous, found himself repeatedly losing money due to customers falsely claiming they hadn’t received their orders.
“Not only do you have to pay back the money that they spent, but the card provider makes a chargeback fee of £28 plus VAT,” he explained. “You’ve provided that customer with the product or the service so you lose out on all ends.”
Driven to frustration, he began meticulously documenting every transaction.”I took it into my own hands and started keeping every food order receipt within a three-month period,” he said. This allowed him to track down the customers involved by cross-referencing order times and addresses.
He then took the unusual step of visiting the customers’ homes to inquire about the chargebacks, successfully recovering the funds each time. However, he strongly advises against others following suit.
“I don’t advise other business owners to do this as it might very well be a little risky, but this was the route I took as the card machine providers and banks don’t seem to be doing anything.”
The experience highlights a growing concern for businesses facing losses from chargeback fraud and a perceived lack of support from financial institutions.
## The Rise of ‘Friendly Fraud’ and How Businesses are Fighting Back 2025/11/29 12:09:15
Getty ImagesAcross the finance industry, companies are emerging to tackle the growing issue of friendly fraud and offer solutions to businesses.
Ariel Chen, CEO of Chargeflow, explains his involvement in fighting fraud: “We built a fast-growing global beauty brand with a subscription box loved by hundreds of thousands of customers.And then the chargebacks hit.”
He described these chargebacks as “not the criminal kind”, but “the sneaky kind”, where a simple click of “I didn’t receive” cost his former business substantially.
He then channeled his expertise into developing a defense for businesses, which he now sells as a service.
## ‘Not victimless’
A cardholder caught attempting this type of fraud could face account closure and a negative impact on their credit rating.
According to payment technology firm SOTPay: “Whilst the individual cardholder might think that filing the odd friendly fraud is ‘no big deal’ or victimless, it is indeed essentially stealing, a crime.”
Some UK legal experts state that the penalties for committing friendly fraud can be severe.
According to Stuart-Miller Solicitors, credit card companies and banks are increasingly pursuing legal action against individuals who falsely claim they did not receive goods or services, or that a transaction was unauthorized.This can lead to civil claims for recovery of losses, and in certain specific cases, even criminal prosecution for fraud. The consequences can include court fines, repayment of the disputed amount, and a damaged credit history.