What is friendly fraud?

Friendly fraud, also called first-party misuse, is when the genuine cardholder disputes a purchase they made and received. It can be a mistake, such as not recognizing a descriptor or forgetting a subscription, or it can be deliberate, when a shopper keeps the goods and asks the bank for the money back.

It is hard to fight because the payment itself looks legitimate. The card was used by its owner, often with successful authentication, so the dispute rests on the cardholder's word against the merchant's records. Merchants surveyed in 2026 attribute about 44% of their chargebacks to it.

How merchants reduce it

• Clear billing descriptors that cardholders recognize on their statement.
• Easy refund and cancellation paths, so shoppers do not turn to their bank first.
• Strong evidence: authentication data, delivery proof and usage logs.
• Subscription reminders before renewals.

What it means for payment operators

Friendly fraud lands on your merchants' dispute ratios like any other chargeback. Pre-chargeback alerts let them refund a contested payment before it becomes a chargeback, which often costs less than contesting it. Keeping payment, authentication and order data on one platform also makes the evidence easier to assemble when a case is worth defending.