Chargeback management specialist calls for increased protections for both customers and merchants in relation to subscription services

Chargebacks911 and Fi911, the global leader in chargeback management technology, has reaffirmed its support of continued discussion around strategies to reduce the likelihood of friendly fraud, such as the Federal Trade Commission’s (FTC) proposed “click-to-cancel” provision to its 1973 Negative Option Rule.

The provision would require businesses to make it as easy for their customers to cancel a recurring subscription as it was to initiate that subscription. For example, if a customer signed up for a service online, then they must be able to cancel using the same website, in the same number of steps. Merchants must also obtain a consumer’s affirmative consent before pitching any offers when a user cancels a service and send an annual reminder of subscription renewals.

The change is aimed at stopping the thousands of complaints the regulator receives each year from consumers who thought that they had cancelled subscriptions that continued to take money from their accounts.

Currently, although merchants are required to disclose the terms of sale before consumers subscribe, including the means to unsubscribe, this information is often only included in the ‘small print’. Companies should also be providing notice at predetermined intervals when payments are going to be taken and giving notice of any changes to terms and conditions, but customers may still find the process of unsubscribing unclear, difficult or time-consuming.

According to Chargebacks911’s experts, the rules would also help to protect businesses from first-party fraud: it has been shown that an inability to cancel subscriptions easily can often result in customers initiating chargebacks instead of trying to grapple with purposefully difficult forms.

“To remain competitive and address growing demands, users require a more comprehensive, self-service experience,” says Chargebacks911 founder and CEO Monica Eaton. “Today’s consumer wants intuitive flexibility, payment scheduling options, and frictionless convenience. Otherwise, retailers face steep competition with their customers’ banks and credit card companies, many of which supply a “concierge-like” service to efficiently address their customers’ needs and wants.”

She added: “This isn’t just a matter of serving shifting consumer preferences. Unfortunately, any perceived breakdown of communication between customer and retailer is an open door for first-party fraud. Left unaddressed, this door may be wedged open permanently.”

First-party fraud is cited by Visa as representing up to 75% of digital commerce chargebacks. It is a growing industry concern, with subscription retailers shouldering a significant share of this burden. According to the LexisNexis True Cost of Fraud Report, every $1 in chargebacks costs the merchant approximately $3.75 and evokes a negative reputational statistic that even if successfully contested, is never removed from their record.

Monica continued: “At Chargebacks911, we advise that companies should include recurring billing information, as well as terms and conditions, within the checkout process. They should also make sure the information is easily accessible for customers. Finally, we suggest that companies increase the frequency of reminders and billing confirmations ahead of renewal dates.”

To learn more about FTC’s Rule Proposal, visit: https://chargebacks911.com/analysis-click-to-cancel-rules/

For more information on Chargebacks911, visit https://chargebacks911.com.

About Chargebacks911

Founded in 2011, Chargebacks911 is the first global company fully dedicated to mitigating chargebacks and eliminating first-party fraud and misuse. As industry-leading innovators, Chargebacks911 is credited with developing the most effective strategies for helping businesses manage disputes and reduce loss in various industries and sectors within the payments space.

Chargebacks911 provides comprehensive SaaS solutions that are highly scalable for managing chargebacks, handling services and fraud strategy management. The company helps decrease the negative impact of chargebacks and provides real-time API connectivity and insights, thereby improving revenue retention using data-driven technology to help ensure sustainable growth for every member of the payment channel.

Chargebacks911’s unparalleled category experience and patented Intelligence Source Detection (ISD™) technology identifies the true source of chargebacks, automatically remediates fraudulently filed disputes, safeguards reputations, monitors feedback 24/7 and provides insight to proactively prevent future fraud. www.chargebacks911.com

About Fi911

Fi911 supports financial institutions with innovative back-office automation technologies created specifically for banking and financial institutions. By supporting direct communications between FIs and their ecosystems, the company’s scalable payment product suite offers features that range from fast, flexible merchant onboarding to highly transparent and feature-rich client portals.

Fi911’s proprietary DisputeLab™ helps resolve chargeback disputes faster and more efficiently by utilizing next-generation technology that leverages a robust rule engine and highly scalable microservices specifically designed to optimize each step in the dispute cycle. The company’s unified platform also provides threat detection, reconciliation, risk management tools, and the ability to generate commissions and ISO pay-outs directly through the system.

Established by the dispute experts at Chargebacks911®, Fi911 offers global reach and expertise, and customized training and support from recognized industry leaders. https://fi911.com/

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