Protecting Your Business From "Friendly Fraud"

We want to make all Point S members aware of a worrying rise in a type of payment fraud that is directly targeting independent garages.

Here's how it works: a customer makes a booking online or by phone, pays by card, comes in and has the work completed, and then contacts their bank to reverse the payment. This is known as chargeback fraud, or "friendly fraud" - and it's becoming increasingly common. In fact, it now accounts for an estimated 80% of all chargebacks.

The impact on your garage: 
For a garage, the damage is multi-layered. The full cost of parts and labour is reversed, and banks typically charge around £28 plus VAT for every disputed transaction. On top of that, there's the administrative burden of challenging the claim. If your chargeback rate consistently exceeds 1%, you risk higher processing fees or even losing your merchant account entirely.
Several Point S members have already been affected. Fraudsters often target businesses they believe have weaker payment controls, so reviewing and tightening your procedures is one of the most effective deterrents available.

To protect your business and prevent these incidents, we recommend you take necessary precautions.  Seek advice as to how you can best tackle this.  Fraudsters often target businesses they perceive as having weaker internal controls. By staying vigilant and updating your payment procedures, you can protect your margins and ensure your garage remains a secure environment for genuine customers.