# One Weird Trick to Get Your Credit Card Charge Reversed? Fraud.

An episode of [Big Take](https://invisiblenetwork.ai/podcast/1578096201), 24 Jul 2026, 16 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/825d4e29-b616-46f4-afd7-ae2b0013005c/501ec796-7e02-4eb3-9bce-b49101130e7f/audio.mp3?utm_source=Podcast&in_playlist=8b1dd624-a026-43e9-8b57-ae2b00130066

American consumers disputed nearly 30% more credit card transactions in 2025 than they did just four years earlier. Some of those “chargebacks” are legitimate issues or outright scams. But increasingly, many are what Bloomberg Businessweek reporter Amanda Mull says is friendly fraud — transaction disputes that aren’t completely honest or the retailer’s fault. On today’s Big Take podcast, Mull joins host Sarah Holder to discuss the sharp rise in chargebacks, and the consequences of this trend for retailers, banks and consumers. Read more: Credit Card Holders Are Using ‘Friendly Fraud’ to Get Back at Retailers We have a special Bloomberg subscription offer for podcast listeners at Bloomberg.com/podcastoffer. Hosted by Sarah Holder; Produced by Julia Press; Reported by Amanda Mull; Edited by Naomi Shavin. Fact-checking by Laura Newcombe; Engineering by Sean Carter. Senior Producer: Naomi Shavin; Deputy Executive Producer: Julia Weaver. Executive Producer: Nicole Beemsterboer. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Amanda Mole has been
[0:09] Speaker 1: covering retail for years. She's tracked the demise of American malls,
[0:14] Speaker 1: the explosion of fast fashion brands, and recently, a growing
[0:18] Speaker 1: sense of distrust between customers and merchants.
[0:22] Speaker 2: People feel like they're being scammed left and.
[0:24] Speaker 1: Right, Sneaky subscription services that are hard to get out of,
[0:28] Speaker 1: restrictive return policies, products that just don't meet expectations.
[0:33] Speaker 2: It's a consumer environment where you feel like you have
[0:36] Speaker 2: less and less purchasing power, less and less ability to
[0:39] Speaker 2: talk to another human about a problem you're having, so
[0:43] Speaker 2: people look for ways to get back at retailers.
[0:47] Speaker 1: One of those ways is something called a chargeback, essentially
[0:51] Speaker 1: disputing a credit card transaction.
[0:54] Speaker 2: It is when you go to your credit card issuer
[0:57] Speaker 2: and go, hey, there's a problem with this transaction or
[0:59] Speaker 2: I didn't buy that, or I don't recognize this. I
[1:02] Speaker 2: want you to reverse the charge. I'm not paying for this.
[1:04] Speaker 1: Pushing back on a credit card charge is it new,
[1:07] Speaker 1: but Amanda found that it is happening more and more
[1:11] Speaker 1: and more.
[1:12] Speaker 2: From twenty twenty one to twenty twenty five, the rate
[1:15] Speaker 2: of chargebacks in the US rose about twenty nine percent,
[1:18] Speaker 2: and worldwide it rose about forty six percent. Some of
[1:21] Speaker 2: that is due to a greater number of credit card
[1:24] Speaker 2: transactions overall, but most of that is because people are
[1:29] Speaker 2: disputing more transactions for a variety of reasons.
[1:34] Speaker 1: Reasons that ranged from the legitimate.
[1:36] Speaker 2: Hey, I ordered this thing online it never showed up. Yeah,
[1:39] Speaker 2: they are not giving me a refund, but I didn't
[1:41] Speaker 2: receive the product, to the deceptive. Yeah I bought this,
[1:45] Speaker 2: but I don't want to pay for it, So I'm
[1:46] Speaker 2: going to tell the bank that it was fraudulent, that
[1:49] Speaker 2: it never arrived, that there was an issue with it,
[1:52] Speaker 2: so I will just get this for free.
[1:54] Speaker 1: I'm Sarah Holder, And this is the big take from
[1:56] Speaker 1: Bloomberg News today on the show, how the rise of
[2:00] Speaker 1: chargebacks is putting merchants on the defense and pulling banks
[2:03] Speaker 1: into the fray, and what this growing trend says about
[2:06] Speaker 1: shopper psychology and the health of the economy overall. For consumers,
[2:14] Speaker 1: filing a chargeback can feel like a quick and easy
[2:17] Speaker 1: path to getting a refund, but behind the scenes, it
[2:21] Speaker 1: actually triggers what can be a long and complicated process.
[2:24] Speaker 2: The bank goes to the merchant and goes you have
[2:27] Speaker 2: a transaction dispute. It charges them a fee which can
[2:31] Speaker 2: be you know, ten, fifteen, twenty dollars depending on the situation,
[2:34] Speaker 2: depending on the vendors involved, and the bank investigates. The
[2:39] Speaker 2: bank goes, okay, merchant, do you have a tracking them
[2:42] Speaker 2: or do you have shipper information? Can we contact the shipper?
[2:45] Speaker 2: And then a lot of times for a very inexpensive transaction,
[2:48] Speaker 2: on the other end of the spectrum, the bank may
[2:50] Speaker 2: look and go, okay, you can have your twenty dollars
[2:52] Speaker 2: back this. It's going to cost us twenty dollars of
[2:54] Speaker 2: labor to even start to look into this, so like,
[2:56] Speaker 2: we're not worried about it. Okay.
[2:58] Speaker 1: So the rate of these chargebacks is increasing, and you
[3:01] Speaker 1: looked at some of the reasons why, the biggest example
[3:03] Speaker 1: being chargebacks that begin with a simple misunderstanding what you
[3:08] Speaker 1: call friendly fraud.
[3:10] Speaker 2: Yeah, so you've bought something as a consumer in what
[3:13] Speaker 2: the banking industry calls card not present transactions. So that's
[3:17] Speaker 2: like all of online shopping, plus things that like feel
[3:21] Speaker 2: not so much like online shopping but actually are, which
[3:23] Speaker 2: is like ordering an uber, ordering door dash, like any
[3:26] Speaker 2: anything you use an app for that, like even if
[3:28] Speaker 2: it's summoned something in real life, that is a card
[3:30] Speaker 2: not present transaction if you let your teenager put your
[3:34] Speaker 2: card and Apple pay and they start using it for stuff.
[3:36] Speaker 2: Because card nott present transactions tend to bounce through a
[3:39] Speaker 2: lot of like payments vendors in third parties. What they
[3:43] Speaker 2: show up as on your credit card statement is sort
[3:46] Speaker 2: of anybody's guests. So you might look at all of
[3:49] Speaker 2: those things and go, I don't recognize any of these
[3:51] Speaker 2: names who spent fifty dollars on the app store, Like
[3:55] Speaker 2: not me, Like why would I do that?
[3:56] Speaker 1: And like where did that charge come from? I need
[3:58] Speaker 1: to dispute that charge.
[3:59] Speaker 2: And there's also the issue of subscriptions. A lot of
[4:03] Speaker 2: retailers will include seven days free or one month free
[4:07] Speaker 2: and then a recurring twelve dollars every month that you
[4:10] Speaker 2: may agree to in like it's a legitimate transaction in
[4:14] Speaker 2: a legal sense, but like you missed that it was
[4:16] Speaker 2: put in a place where it was designed for you
[4:18] Speaker 2: to miss it.
[4:19] Speaker 1: Or you sign up for a free trial, you forget
[4:20] Speaker 1: to cancel, but you meant to cancel.
[4:22] Speaker 2: Right, you meant to cancel, and you look at your
[4:24] Speaker 2: credit card statement, and it feels like someone has stolen
[4:27] Speaker 2: money from you. So all of these transactions are disproportionately
[4:31] Speaker 2: likely to be subject to chargebacks, when in reality none
[4:35] Speaker 2: of those are fraud.
[4:38] Speaker 1: Chargebacks have become really easy to file. Many banking apps
[4:42] Speaker 1: have a button that lets you dispute a transaction. Consumers
[4:45] Speaker 1: can often feel it's worth a try given that low
[4:48] Speaker 1: barrier to entry and the high likelihood of getting a
[4:51] Speaker 1: refund on a low dollar transaction.
[4:53] Speaker 2: Especially if you have a premium credit card that's sort
[4:56] Speaker 2: of like baked into the service where it's like, okay,
[4:59] Speaker 2: if it's like if you're disputing seven dollars on the
[5:01] Speaker 2: app store that you don't think you bought, like, that's
[5:03] Speaker 2: probably just getting refunded. The credit card was to keep
[5:06] Speaker 2: you happy. And also like it is a very labor
[5:08] Speaker 2: and time intensive process to investigate credit card transaction disputes.
[5:13] Speaker 2: So if below a certain dollar amount, and that can
[5:16] Speaker 2: vary across card issuers, they just decide that like, hey,
[5:19] Speaker 2: we're just gonna honor these.
[5:21] Speaker 1: So you also talked about this other category of chargebacks
[5:25] Speaker 1: where people are basically intentionally using them to get free stuff. Yes,
[5:30] Speaker 1: talk about this not so friendly fraud how prevalent is
[5:33] Speaker 1: this and how does it work?
[5:35] Speaker 2: Well, it's growing in prevalence. I would say what you
[5:37] Speaker 2: see with this type of intentional sort of malfeasance is
[5:42] Speaker 2: generally younger consumers. You know, TikTok is a place where
[5:46] Speaker 2: young people go to sometimes invent classic types of fraud
[5:50] Speaker 2: from first principles, and this is another one. You know,
[5:53] Speaker 2: TikTok tries to take these down as they come up.
[5:56] Speaker 2: But there's a lot of people on various platforms telling
[6:00] Speaker 2: you that, like, oh, if you're like upset with how
[6:03] Speaker 2: long shipping is taking to a chargeback, if you're upset
[6:06] Speaker 2: with how long it's taking them to like approve your
[6:08] Speaker 2: return to a charge back, if.
[6:10] Speaker 1: You just weren't trick to get your money back.
[6:12] Speaker 2: Is fraud fraud?
[6:13] Speaker 1: Yeah, But what you're describing is that, you know, in
[6:16] Speaker 1: part this could be an nefarious impulse to get one
[6:21] Speaker 1: over on a retailer, and in part it's responding to
[6:24] Speaker 1: this feeling that consumers have that you know, inflation is rising,
[6:29] Speaker 1: companies are shrinking the size of their products and charging
[6:32] Speaker 1: the same price. There is this feeling among consumers. I
[6:35] Speaker 1: think that they're getting.
[6:37] Speaker 2: Scarped, right, whether or not those scams are legally actionable.
[6:42] Speaker 2: Having subscription fees baked into everything in a way that
[6:46] Speaker 2: like is constantly surprising and that is hard to opt
[6:48] Speaker 2: out of, is like a bad consumer experience. It feels
[6:51] Speaker 2: like being stolen from even if you as a company,
[6:53] Speaker 2: you as a merchant, followed the letter of the law,
[6:56] Speaker 2: like getting rid of your customer service agents in order
[7:00] Speaker 2: to divert everybody to an AI bot that like can't
[7:04] Speaker 2: answer specific questions about non standard policy issues. Like that
[7:09] Speaker 2: feels like you are being, as a consumer sort of
[7:12] Speaker 2: shunted into a system designed to keep your money even
[7:15] Speaker 2: when something has gone wrong and you deserve some sort
[7:18] Speaker 2: of redress or just want to talk to a person,
[7:20] Speaker 2: like when you were spending your paycheck, like you were
[7:23] Speaker 2: supposed to have some sort of power in those transactions
[7:26] Speaker 2: like that, the American system is designed to tell you
[7:29] Speaker 2: that that is where you assert yourself. And if it
[7:31] Speaker 2: gets harder and harder to do that, and things get
[7:33] Speaker 2: more and more misleading, and you feel like you don't
[7:36] Speaker 2: have options for redress, you can see how people justify
[7:40] Speaker 2: just reversing transactions.
[7:42] Speaker 1: Yeah, using the chargeback as a way to claw back
[7:44] Speaker 1: that power, and.
[7:45] Speaker 2: You might get a couple things that way, like you
[7:48] Speaker 2: might get a couple free T shirts, free app store stuff.
[7:52] Speaker 2: But like overall banks also, you know, card issuers look
[7:58] Speaker 2: at who is filing a lot of chargebacks and they
[8:01] Speaker 2: will close your account if you are doing it in
[8:03] Speaker 2: a really egregious way. I don't think it's beyond the
[8:06] Speaker 2: horizon of possibility that they will you report you to
[8:08] Speaker 2: law enforcement if they think you're doing it in a
[8:10] Speaker 2: felonious way.
[8:11] Speaker 1: And to be clear, because this is illegal. It is
[8:13] Speaker 1: illegal to erroneously file a charge back whence you have
[8:17] Speaker 1: not been defrauded.
[8:19] Speaker 2: Yes, it is illegal to claim that you were a
[8:22] Speaker 2: victim of that crime in order to gain a financial
[8:25] Speaker 2: advantage over over a merchant. Yeah, kids, yeah, it's illegal.
[8:31] Speaker 2: You know, there's a variety of consequences that can happen
[8:35] Speaker 2: because of this, Like you can have your credit card closed,
[8:39] Speaker 2: which will ding your credit report, like you will be
[8:42] Speaker 2: in bad standing with that financial institution. And then also
[8:45] Speaker 2: depending on where you're doing the chargebacks, like they might
[8:48] Speaker 2: decide that they don't want you as a customer anymore.
[8:51] Speaker 2: You know, people get very mad at airlines and whether
[8:54] Speaker 2: or not a service was rendered as promised is sort
[8:57] Speaker 2: of in the eye of the beholder when it comes
[8:59] Speaker 2: to the travel industry, the hospitality industry. But if you
[9:03] Speaker 2: file a chargeback against Delta or against United, they might
[9:07] Speaker 2: decide not to do business with you in the future.
[9:10] Speaker 2: The same is true of hotels. Like if you are
[9:12] Speaker 2: filing like a lot of chargebacks against these large businesses
[9:16] Speaker 2: that have reason to suspect that you are filing them
[9:19] Speaker 2: in a punitive way instead of because of a real issue,
[9:22] Speaker 2: like they can choose to close your account. They can
[9:25] Speaker 2: choose to ban you from their service, like you can
[9:27] Speaker 2: get banned from Amazon. People who do this a lot
[9:30] Speaker 2: often have their purchasing options curtailed in certain ways.
[9:35] Speaker 1: After the break. The consequences of the chargeback crates for retailers, banks,
[9:41] Speaker 1: and society. So we've talked a lot about consumer psychology here,
[9:51] Speaker 1: but I want to also talk about what this all
[9:53] Speaker 1: means for merchants. What has the rise of chargebacks meant
[9:57] Speaker 1: for these companies, either the big re tailers like Amazon
[10:01] Speaker 1: or the small businesses that are experiencing this.
[10:04] Speaker 2: For big retailers, big companies, big merchants, to a certain extent,
[10:07] Speaker 2: they're just going to roll it into the overall price
[10:10] Speaker 2: levels that they charge like the it is the cost
[10:12] Speaker 2: of doing business. A lot of them have engaged third
[10:15] Speaker 2: party vendors specialists who have particular like AI capabilities to
[10:21] Speaker 2: separate the wheat from the chaff in these complaints and
[10:23] Speaker 2: like figure out which ones they actually need to deal
[10:26] Speaker 2: with versus which ones they can sort of ignore or
[10:29] Speaker 2: just ban that customer or something like that.
[10:31] Speaker 1: So third party companies that work with them to identify.
[10:35] Speaker 2: Chargeback fraud, identify chargeback fraud and to sort of do
[10:39] Speaker 2: the work of gathering evidence and presenting a case to
[10:43] Speaker 2: the bank and like trying to sometimes reach out to
[10:46] Speaker 2: the customer and figure out if there's a way to
[10:48] Speaker 2: come to a understanding. Before you know, things go further.
[10:52] Speaker 2: Because if retailers incur too many chargebacks like that is
[10:55] Speaker 2: a problem for them. Payment processors don't want to work
[10:59] Speaker 2: with companies that incur a lot of chargebacks. That makes
[11:01] Speaker 2: you a high risk merchant, and it means that you
[11:04] Speaker 2: were going to have to pay higher transaction fees to
[11:07] Speaker 2: credit cards, and it means that you were going to
[11:09] Speaker 2: have to keep larger cash balances in scrow to deal
[11:12] Speaker 2: with disputes that come up.
[11:14] Speaker 1: These merchants are hiring these third party actors. How much
[11:17] Speaker 1: is that costing them?
[11:18] Speaker 2: It costs a lot of money. For a lot of vendors.
[11:21] Speaker 2: There's going to be a per investigation fee, and then
[11:24] Speaker 2: there's like the sort of general retainer, and like the
[11:27] Speaker 2: onboarding a vendor into your very large business is always
[11:31] Speaker 2: quite expensive. I don't have a specific number because it
[11:34] Speaker 2: really depends on the size of the business, the suite
[11:37] Speaker 2: of services, but it is it is an enormously expensive
[11:39] Speaker 2: thing because chargebacks are enormously expensive. If you lose a
[11:44] Speaker 2: chargeback that you shouldn't have lost as a merchant, you're
[11:47] Speaker 2: out the penalty, you're out the revenue, and you're out
[11:50] Speaker 2: the product or the time.
[11:51] Speaker 1: So it's expensive to fight chargebacks, but not as expensive
[11:55] Speaker 1: as it is to lose a charge back claim.
[11:57] Speaker 2: Yes, for small merchants, the impact is more direct. If
[12:02] Speaker 2: someone files a chargeback against you as a merchant, you
[12:04] Speaker 2: were getting charged the chargeback penalty by the bank. Even
[12:09] Speaker 2: if you win the dispute, that's fifteen dollars. Let's say
[12:13] Speaker 2: out the door immediately.
[12:15] Speaker 1: And what about banks? What does it mean for banks
[12:17] Speaker 1: to be sort of in the middle of this negotiation,
[12:20] Speaker 1: this tug of war? How are they responding to the
[12:22] Speaker 1: rise of the chargeback sort of.
[12:24] Speaker 2: Like merchants, they are employing a lot of new types
[12:27] Speaker 2: of technology to sort of like figure out which are
[12:29] Speaker 2: the disputes that they need to focus on, that deserve manpower,
[12:33] Speaker 2: that deserve an actual investigator, which ones are the ones
[12:36] Speaker 2: that they can deny pretty quickly, and which ones are
[12:39] Speaker 2: the ones that they should go ahead and probably approve
[12:41] Speaker 2: pretty quickly. There's various types of technology, various types of
[12:44] Speaker 2: vendors that do that as well. For banks, and then
[12:47] Speaker 2: really your recourse as a bank if you're not going
[12:49] Speaker 2: to refer someone to law enforcement, if it's not a
[12:51] Speaker 2: situation where there's like a massive scale of these fraudulent chargebacks,
[12:55] Speaker 2: then if someone is abusing the system and creating a
[12:58] Speaker 2: lot of work for you as a bank in a
[13:00] Speaker 2: way that looks like probably like potentially criminal activity, then
[13:04] Speaker 2: you can just close their account and then, like the
[13:07] Speaker 2: payment processors also are trying to identify bad actors on
[13:11] Speaker 2: the merchant side, a company that is constantly being disputed
[13:15] Speaker 2: is probably doing something that makes you not want to
[13:18] Speaker 2: associate with them as a processor.
[13:21] Speaker 1: Help me understand how big of a deal this phenomenon is,
[13:26] Speaker 1: Like is this something that's a warning sign about our
[13:28] Speaker 1: economy writ large that all this money is flowing into
[13:31] Speaker 1: this chargeback economy, that trust between consumers and merchants is
[13:35] Speaker 1: breaking down like this.
[13:37] Speaker 2: I think it is a big deal. Like I think
[13:39] Speaker 2: that the financial implications for it, especially for small businesses
[13:42] Speaker 2: like are a really big deal. We're talking about like
[13:44] Speaker 2: hundreds of millions of transaction disputes. It is a really
[13:47] Speaker 2: large number annually, and that's a lot of money that
[13:51] Speaker 2: is sort of being sucked into this like weird gray
[13:54] Speaker 2: area of like maybe it is involved in fraud, maybe
[13:57] Speaker 2: it is not, but it's an in that like our
[14:01] Speaker 2: interactions with the economy have gotten more confusing and more
[14:04] Speaker 2: stressful and more broadly, I think it is just like
[14:07] Speaker 2: another indicator of trust the undergirds a lot of elements
[14:12] Speaker 2: of like living in a functional society is breaking down,
[14:15] Speaker 2: like we have sort of I think lost a sense
[14:19] Speaker 2: of like who it is we're dealing with and that
[14:22] Speaker 2: you know whether or not there actually is a human
[14:25] Speaker 2: on the other end of that transaction, and it makes
[14:27] Speaker 2: us a little bit less trustworthy to each other, and
[14:31] Speaker 2: I think it motivates people to act in untrustworthy ways.
[14:36] Speaker 1: This is The Big Take from Bloomberg News. I'm Sarah Holder.
[14:39] Speaker 1: The show is hosted by Me, David Gera, and Wan Ha.
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