# What is Friendly Fraud?

What is Friendly Fraud? A customer who made a legitimate purchase and files a chargeback — forgot they bought it, didn't recognize the charge, a child…

## How it works in practice

Friendly fraud is the 'hidden thief.' The customer looks legitimate, the order was correct, the product was delivered — and then a chargeback. The bank usually sides with the customer because they 'don't recognize' the charge. Defense: good documentation, a clear billing descriptor, and immediate cancellation if requested.

## Related metrics

- Chargeback — friendly fraud is a type of chargeback
- 3D Secure — doesn't protect against friendly fraud
- Payment Descriptor — a clear billing descriptor reduces friendly fraud
- Fraud Prevention — tools that help detect it

## Common misconception

'3D Secure protects against friendly fraud.' No. 3DS protects against unauthorized fraud (a stolen card). Friendly fraud is the real customer filing the chargeback. 3DS doesn't stop that. The defense: documentation, a clear descriptor, and a chargeback dispute.

## How to fix it

High friendly fraud? (1) A clear billing descriptor — your business name visible on the bank statement (not 'PAYMENT*1234'), (2) Send order confirmation + delivery confirmation with tracking, (3) Enable chargeback alert services (Ethoca, Verifi), (4) Dispute with full documentation.

## Real-world example

Electronics store: 45% of chargebacks were friendly fraud ('don't recognize the charge'). Changed the billing descriptor from 'TECH STORE' to '[store name] ONLINE.' Friendly fraud dropped 62% — customers recognized the charge.

## Where to start

A clear billing descriptor is the easiest, highest-ROI action against friendly fraud. Check now: log into your own bank account — do you recognize your business's name? If not, neither do your customers.

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Category: Payments · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/friendly-fraud