Experts warn that refund fraud is rising sharply across Britain. The scam targets shopkeepers and restaurant owners through the chargeback system. This system allows customers to reverse card payments if they face fraud or faulty service.
However, some people misuse it. They pay for a meal or product, then contact their bank and claim the payment was unauthorized. The bank refunds the money, leaving the business to absorb the loss.
Researchers at Datos Insights estimate chargebacks could reach 281 million globally this year. They warn that up to 70% may be fraudulent. Monica Eaton, CEO of Chargebacks911, says the issue has become an epidemic. She adds that small businesses suffer the most.
Nima Safaei, owner of 40 Dean Street in Soho, says fraudsters cost his restaurant £2,000 in one season. He calls the experience disheartening and damaging for independent firms.
Industry body UK Finance explains that chargebacks protect honest customers. Yet some abuse the system as a “life hack.” In serious cases, fraudsters keep goods while claiming refunds.
Business owners warn that rising losses will push prices higher. In the end, honest customers may pay the price.
