Thursday, June 12, 2025
My Account
Join Council
USA Wire
  • News
    • Politics
    • Sports
    • World
  • Business
    • Entrepreneurship
    • Finance
    • Marketing
  • Culture
    • Lifestyle
    • Celebrity
    • Travel
  • Entertainment
    • Gaming
  • Sports
  • Health
    • Food
    • Fitness
  • Crypto
  • Technology
No Result
View All Result
  • News
    • Politics
    • Sports
    • World
  • Business
    • Entrepreneurship
    • Finance
    • Marketing
  • Culture
    • Lifestyle
    • Celebrity
    • Travel
  • Entertainment
    • Gaming
  • Sports
  • Health
    • Food
    • Fitness
  • Crypto
  • Technology
No Result
View All Result
USA Wire
No Result
View All Result
Home Business Finance

Consumer Financial Protection in Doubt as Credit Card Fraud Spikes

USA Wire Staff<span class="bp-verified-badge"></span> by USA Wire Staff
March 17, 2023
in Finance
Reading Time: 4 mins read
Financial
11
SHARES
79
VIEWS
Share on FacebookShare on Twitter

The Consumer Financial Protection Bureau (CFPB) was created in 2011 to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the marketplace. In November 2022, based on its financial structure, the U.S. Court of Appeals for the Fifth Circuit ruled that the bureau was unconstitutional. The CFPB has appealed the ruling to the Supreme Court; a final decision is expected sometime this year.(1)  

Spike in chargebacks

What effect this will ultimately have on consumers’ financial safety remains to be seen. Meanwhile, consumers, financial institutions, and retailers—especially online vendors involved in card-not-present transactions—are dealing with an unexpected spike in chargebacks.

RecommendedReads

From AI Advisors to Political Stock Watchdogs: How Data is Reshaping Modern Decision-Making

Resilience and Growth: Building a Future-Ready Mindset in a Dynamic World

Navigating Retail and Tech Evolution: How Businesses Adapt in Uncertain Times

Chargebacks occur when a consumer reports a transaction issue with their financial institution, such as a fraudulent credit card charge or if they’ve been swindled by a bad-faith merchant. The issuing bank can then charge back the transaction by reversing the payment from the vendor while a pending investigation ensues. Increasingly, these situations are cases of “friendly fraud,” where the consumer knows perfectly well that he or she made a valid purchase but does not wish to pay for it.

Chargebacks are expensive

When a chargeback is initiated, the merchant is burdened not only with the loss of revenue from the sale but with chargeback penalties, alert and processing costs, and administrative fees that cost the merchant $3.75 for every dollar lost to fraud, on average. Moreover, the chargeback fee the bank assesses is non-refundable, even if the merchant successfully contests the chargeback. Our internal figures at Chargebacks911 show the average cost of 2023’s projected 615 million chargebacks will be $191, for a total of $117.6 billion.(2)  

The road ahead

Most of this per-incident cost burden stems from an antiquated and overly complex system for investigating and resolving chargeback disputes. Fortunately, the difficulties attendant on chargeback defense are being greatly eased by (a) the emergence of companies skilled and experienced in dealing with these matters, and (b) companies in the fintech sector that are essentially automating chargeback defense and taking the load off overstretched managers and back-office employees in the affected industries.

More dispute or transaction inquiries, in fact, could be a good thing. It makes sense that consumers want to contact their bank instead of multiple retailers when they wish to cancel a subscription, reship a product, or cancel an order. The problem exists when these inquiries are misclassified and categorized as “chargebacks,” which is the only existing railway to trigger a response from the retailer. As a result, there should be “breeds” or “classes” of chargebacks, supported by having the right data and technology. It’s not enough to provide systems that are smarter, faster, and more secure; they also must be more transparent – a fortunate byproduct of digital innovation.

To be successful, the way forward needs to include win-win-win solutions; we need to bridge the communication gap that creates the chargeback requirement in the first place and provide avenues to more efficient, data-driven decisions. Consumer behaviors have evolved to where a chargeback is, often, a fundamental request for more information and customer service attention. The opportunity to improve this mechanism is wide-reaching and within reach, given more open doors to innovation.

Tech needs to lead

As we said, the Supreme Court will ultimately decide the fate and future of the CFPB. If it is shuttered, we know there will be sweeping changes taking place in the financial services industry. Before that happens—right now, in fact—is the ideal time for vendors to innovate and make sure they are prepared to operate smoothly when current regulations are disrupted.

About Monica Eaton, Founder and Chief Evangelist, Chargebacks911

Monica Eaton is the Founder and Chief Evangelist of Chargebacks911. Chargebacks911 is the global leader in chargeback prevention and remediation technology. As a provider or supplier to financial technology companies, Chargebacks911 helps safeguard more than 2.4 billion transactions per year on behalf of clients in 87 countries around the world. For details on Chargebacks911’s comprehensive dispute management solutions, visit https://chargebacks911.com 

Boomers are cutting their credit card debt(Opens in a new browser tab)

References:

  1. “Consumer Agency Asks U.S. Supreme Court to Review Case That Invalidated Its Funding.” Reuters, Thomson Reuters, 15 Nov. 2022, reuters.com/legal/government/consumer-agency-asks-us-supreme-court-review-case-that-invalidated-its-funding-2022-11-15/. 
  2. “What’s the Annual Cost of Chargebacks? the Truth Will Shock You.” Chargebacks911, 12 July 2022, chargebacks911.com/chargeback-costs/. 

By Monica Eaton, Founder and Chief Evangelist, Chargebacks911

Share4Tweet3
Previous Post

Using Data Analytics to Grow Your Business: Three Focus Areas

Next Post

Redefining Tax Strategy and Compliance with AI: Pallav Kumar Kaulwar’s Vision for the Intelligent Enterprise

USA Wire Staff<span class="bp-verified-badge"></span>

USA Wire Staff

USA Wire is a millennial-focused news publication that provides content in a way that relates to the modern world. USA Wire strives to provide unbiased and accurate coverage of current events, highlighting both the good and bad.

Related Posts

edit post
Data
Finance

From AI Advisors to Political Stock Watchdogs: How Data is Reshaping Modern Decision-Making

June 11, 2025
edit post
Resilience
Finance

Resilience and Growth: Building a Future-Ready Mindset in a Dynamic World

June 11, 2025
edit post
Retail
Finance

Navigating Retail and Tech Evolution: How Businesses Adapt in Uncertain Times

June 11, 2025
Next Post
edit post
0 (1)

Redefining Tax Strategy and Compliance with AI: Pallav Kumar Kaulwar’s Vision for the Intelligent Enterprise

edit post
Entrepreneur

Insights Gained from My Experience as an Entrepreneur

edit post
Guardians of Rescue

Help needed to rescue Loki, dog who inspired hope in U.S. troops - Guardians of Rescue

Discussion about this post

Follow us

Recommended

edit post
Medical Cannabis

How to Get a Medical Cannabis Card

9 months ago
edit post
a rat sitting on a piece of wood

Why Rats Are Smarter Than You Think and Why You Still Need a Rat Exterminator 

1 week ago
edit post
Medical Cannabis

How to Get a Medical Cannabis Card

9 months ago
edit post
Alaska Airlines Customer

9 Ways to Reach Alaska Airlines Customer Service by Phone, Chat: Step by step guide

2 months ago

Categories

  • Business
  • Celebrity
  • Construction
  • Crypto
  • Culture
  • Electrical
  • Entertainment
  • Entrepreneurship
  • Finance
  • Fitness
  • Food
  • Gaming
  • Health
  • Home Improvement
  • Lifestyle
  • Marketing
  • Medicine
  • Movies
  • Music
  • News
  • Opinion
  • Plumbing
  • Politics
  • Renovations
  • Sports
  • Technology
  • Travel
  • Uncategorized
  • World

Topics

2018 League (12) AI (11) Asian Games 2018 (20) benefits (15) Budget Travel (18) Business (36) celebrity (16) Chopper Bike (11) Cleaning (12) comfort (11) company (11) Digital (17) eco-friendly (11) fitness (12) food (11) fun (13) future (12) guide (33) Health (35) healthcare (15) hiring (13) home (31) Istana Negara (17) legal (14) Maintenance (12) Market Stories (22) modern (11) music (14) National Exam (13) online (11) pandemic (11) Paws of War (13) performance (13) podcast (11) professional (12) Services (23) Social media (11) Software (15) summer (17) technology (15) therapy (11) tips (25) trends (15) Visit Bali (16) WonderWorks (19)
USA Wire

© 2024 USA Wire

Navigate Site

  • Join Council – Become a Contributor
  • My Account

Follow Us

No Result
View All Result
  • Join Council
  • Politics
  • News
  • Business
  • Culture
  • Sports
  • Lifestyle
  • Travel

© 2024 USA Wire

Go to mobile version