Combating “Friendly Fraud” in SaaS Web Portals: A Guide to Prevention


In the ever-expanding world of online commerce, “friendly fraud” or chargeback fraud has become a significant concern for SaaS web portal owners. This type of fraud occurs when a customer makes a legitimate purchase with their credit card and then disputes the charge with their bank, often using false claims. The consequences can be severe, leading to lost sales, goods, shipping costs, and even additional chargeback fees.

Understanding Friendly Fraud

Friendly fraud is alarmingly common, with a 2019 study estimating that as many as 71% of chargebacks are not from stolen or compromised credit cards but from bad customers. Some common examples of this fraud include:

  • Claiming the item wasn’t delivered when it was.
  • Claiming the item doesn’t match the description.
  • Claiming a return without receiving a refund.
  • Claiming an order was canceled but sent anyway.

In these instances, banks often take their customer at their word, reversing the charges without thorough investigation. This leaves the business owner at a loss, with no recourse.

The Limitations of Traditional Anti-Fraud Tools

Traditional anti-fraud tools, which utilize machine learning to detect suspicious behavior, are effective against stolen or compromised cards. However, they fall short when dealing with friendly fraud, as there’s nothing inherently suspicious about a customer buying something and shipping it to their own address.

The Solution: Variable Background Check Services

To combat friendly fraud, SaaS web portal owners can turn to variable background check services, such as ClearCheck. These platforms work differently from traditional anti-fraud tools by focusing on the customer’s chargeback history rather than attempting to detect suspicious transactions.

How It Works

  1. Collecting Chargeback Reports: The platform gathers chargeback reports from millions of online transactions.
  2. Identifying Bad Customers: By analyzing chargeback history, the platform identifies customers associated with multiple chargebacks.
  3. Warning the Business: If a customer or address is linked to numerous chargebacks, the platform warns the business, allowing them to decide whether to proceed with the order or cancel it.

Benefits of Using Variable Background Check Services

  • Targeted Approach: By focusing on the customer’s history rather than the transaction, these services can detect friendly fraud that traditional tools miss.
  • Cost Savings: By identifying and avoiding bad customers, businesses can save on lost sales, goods, shipping costs, and chargeback fees.
  • Flexibility: These services can be customized to fit the specific needs and risk tolerance of the business.


Friendly fraud is a growing threat to SaaS web portal owners, costing them lost revenue, reputation, and customer trust. By employing variable background check services like ClearCheck, businesses can take a proactive approach to identify and prevent this type of fraud.

In a world where traditional anti-fraud tools fall short, these innovative solutions offer a targeted and effective way to protect against the unique challenges of friendly fraud. By understanding the nature of this threat and implementing the right prevention strategies, SaaS web portal owners can safeguard their businesses and foster a more secure and trustworthy online commerce environment.

Remember: Knowledge is power, but it comes with great responsibility.

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