Chargeback Prevention

Preventing Friendly Fraud with Ethoca’s Consumer Clarity

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All chargebacks are not created equal. While they may have the same impact on your revenue and chargeback rates as legitimate chargebacks, the illegitimate ones—often categorized as "friendly fraud"—must be fought through the representment process, taking up time and resources.

Worse yet, they can put merchants into an adversarial position with cardholders who might otherwise have stayed loyal customers if a dispute could have been avoided. One way to prevent unintentional friendly fraud is to use third-party services like Ethoca’s Consumer Clarity. How does Ethoca's Consumer Clarity service work, and can it really help merchants avoid friendly fraud chargebacks?

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Chargebacks exist to protect consumers from fraud perpetrated by credit card thieves and unethical merchants. Chargebacks that are based on true fraud or by merchants failing to uphold their sales agreements are legitimate and must be accepted—to avoid these chargebacks, merchants must learn how to prevent them from happening in the first place.

Friendly fraud chargebacks, on the other hand, result from false or erroneous dispute claims. Merchants can fight these chargebacks and win, but proactive prevention is still the most cost effective solution.

Some friendly fraud is intentionally carried out as a form of cyber-shoplifting, and it’s probably more accurate to refer to these instances as chargeback fraud. What makes friendly fraud “friendly” is that it comes from real customers who may be confused about a transaction or mistaken about what constitutes a valid dispute claim.

If you can address the issues these customers are having and keep things from escalating to a transaction dispute, you may be able to salvage the relationship and retain them as customers.

Ethoca’s Consumer Clarity offers a way to avoid one of the most common causes of friendly fraud chargebacks, which is when a customer doesn’t recognize a merchant’s charge on their bank statement.

What is Ethoca’s Consumer Clarity?

When a cardholder looks at their bank statement, they can see all the recent transactions processed against their payment card. The way cardholders often discover that they’ve become victims of credit card fraud is by reviewing these statements and finding unfamiliar charges that they didn’t authorize.

Unfortunately, it’s not uncommon for cardholders to forget about a purchase they made, or fail to recognize the name on the merchant descriptor listed next to the charge. When that happens, they may end up disputing a valid transaction.

Merchants can fight these chargebacks by providing proof that the transaction was properly authorized and that the cardholder received the goods or services they paid for, but at that point the damage is already done.

The merchant’s chargeback rate has gone up, they’ve spent time and labor to deal with the chargeback, and the whole experience may be negative enough that the customer no longer wants to shop with that merchant in the future (assuming the merchant hasn’t already blocked the customer out of an abundance of caution).

Ethoca is a vendor, owned by Mastercard, which provides services for their parent company’s payment cards. Consumer Clarity is a rebranding of one of their earlier products, Ethoca Eliminator, that attempts to resolve the problem of friendly fraud resulting from unrecognized transactions.

Merchants who sign up for Consumer Clarity can use it to reduce confusion, provide cardholders with more detailed information about their transactions, and hopefully avoid chargebacks arising from honest mistakes or forgetfulness.

How Does Consumer Clarity Work?

Manage Chargeback In-House Or OutshoreConsumer Clarity works by creating a secure communications channel with the merchant, through which transaction data and other information is automatically sent.

This information can include store and brand names, logo images, phone numbers, website addresses, the merchant’s location, and digital receipts that include purchase details and a full breakdown of charges. This information can be loaded directly into the online banking app or website that the cardholder is using.

The information is also sent to the issuer’s call center, so when a cardholder tries to dispute a transaction, the representative can see the transaction details. This makes Consumer Clarity beneficial even for cardholders who prefer printed statements to online banking, and can empower call center representatives to dissuade cardholders from trying to file illegitimate disputes.

Consumer Clarity can cover more than 145 million different merchant locations in over 200 countries. By providing a transparent view into the charges that appear on bank statements, this service can eliminate some of the uncertainty that leads cardholders to dispute charges that they don’t recognize or remember.

Do Merchants Need Services Like Consumer Clarity?

Unrecognized charges on bank statements are one of the more frequent causes of friendly fraud chargebacks, especially when merchant descriptors are unclear.

Some merchants neglect to update this information with their acquirer and end up using storefront names that differ from the company name that appears in the descriptor. Updating descriptors and including contact information can help, but mistakes can still occur.

Visual cues can be among the most effective ways to spark recognition, which is why Consumer Clarity’s ability to display your logo directly within the online banking interface can make a huge difference.

While Consumer Clarity is targeted at good customers who are simply having trouble recognizing their charges, it can reduce intentional friendly fraud too. When the issuer’s call center representatives have access to detailed transaction data, they can recognize false claims more easily and discourage customers from pursuing illegitimate disputes.

Just keep in mind that Consumer Clarity is a Mastercard product and may not provide full protection for disputes involving other card brands. Solutions like Verifi’s Order Insight can provide similar coverage for Visa card transactions.

As always, protecting yourself from chargebacks requires a multi-front approach that covers all of your potential vulnerabilities.


It’s not always easy for merchants to keep up with all of the products and services that promise to protect them from fraud and chargebacks. It pays to be selective and choose solutions that address the specific causes of your chargebacks, as revealed through a careful analysis of your chargeback data.

That said, the tools offered by vendors like Ethoca and Verifi, who partner directly with their parent card networks, can be among the most effective. They can integrate with the inner workings of the banking and interchange systems to provide defenses and insights in real-time, at the transaction level.

By utilizing these and other appropriate tools, merchants can lower their chargeback rate, hold on to their revenue, and preserve good relationships with their customers.

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