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Fraud

Fighting Chargeback Fraud: Why Identity Verification Is Your Best Defense

Chargeback fraud – also known as “friendly fraud” – is a growing and costly issue for service-based businesses. It occurs when a customer disputes a legitimate transaction, falsely claiming it was unauthorized or unsatisfactory, often with the intent of getting services for free. For companies operating online or over the phone, this kind of fraud is particularly dangerous, eroding profit margins, damaging merchant reputations, and straining relationships with payment processors.

At VerifiNow, we specialize in protecting businesses from identity-based threats like chargeback fraud with real-time biometric verification and authentication. Here’s how chargeback fraud works – and how your business can stop it before it starts.


The Anatomy of a Chargeback Fraud

Chargeback fraud typically follows a familiar pattern:

  1. A service is requested and delivered – be it consulting, tech support, or virtual instruction.

  2. The customer pays via credit or debit card.

  3. Days or weeks later, they file a chargeback with their bank, claiming the service was never authorized or never provided.

Without strong proof of identity or transaction validity, service providers often lose these disputes – even when they’re in the right.


Why Traditional Defenses Fall Short

In service industries, especially those without physical goods, defending against a chargeback can be tricky. Unlike e-commerce, there’s no shipping receipt or delivery confirmation. Screenshots, call logs, and emails may not be enough to sway a bank’s decision. And manual ID checks can be spoofed with stolen credentials or synthetic identities.


How VerifiNow Helps You Win the Fight

VerifiNow’s identity verification platform gives businesses the tools they need to prove customer identity at the point of transaction. Here’s how it works:

  • Government ID Verification: Customers upload a photo of a government-issued ID, which VerifiNow validates for authenticity and signs of tampering.

  • Facial Biometrics with Liveness Detection: A live selfie is required and matched to the ID. Our AI confirms the person is physically present – not a photo, video, or deepfake.

  • Address Verification: Our platform cross-references billing information with ID data to confirm alignment.

  • Digital Audit Trail: Each step is logged, timestamped, and stored – providing powerful, irrefutable evidence in case of a dispute.

This multi-layered verification not only deters fraudsters but gives businesses compelling documentation to challenge illegitimate chargebacks with confidence.

  • chargeback
  • ecommerce
  • fraud prevention
  • friendly fraud

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Recent posts

  • Why Instant, In-Person ID Document Verification Matters
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  • Stop Asking for Selfies and ID Emails: Why Manual ID Checks Fail (and What to Do Instead)

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Fraud, Identity Verification, Policy Updates

Stop Asking for Selfies and ID Emails: Why Manual ID Checks Fail (and What to Do Instead)

If your team still asks customers, patients, or students to email or upload photos of an ID and a selfie for a human to eyeball – this post is for you. It feels simple. It’s familiar. But it’s also fragile, expensive, and increasingly dangerous in a world of AI-generated media and industrialized fraud. Below is […]

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