A business owner says he was scammed twice by a buyer who then gloated about it by sending him insulting emails. He says he reported the incident to Stripe, but the platform’s response was disappointing.

Having a side hustle in this day and age is pretty common, especially with various platforms that make it much easier to build an online business.

However, the comfort of having a business online also comes with some risks.

Yoav Aner is a niche business owner who sells Ciglue, also known as cigar glue. He recently had a customer who placed an order and, despite receiving it without issue, filed a dispute.

After the seller contacted them about the situation, the buyer said that it was just a misunderstanding.

Apparently, “it was the bank’s mistake because the bank bundled this payment with some real fraudulent transactions from the Philippines,” Aner said in a blog post.

The buyer then promised to contact the bank and even pay the seller back. Aner said that he submitted the delivery evidence, the website policy, and the communication between the buyer and the seller.

But he soon discovered that the buyer was lying and claimed not to have received the item. The dispute was granted in their favor.

Soon after, the same buyer placed another order and did the same thing. Not only were they once again granted the refund, but they also gloated about it to the seller by sending mocking emails.

“The customer emailed me to gloat about their clever scheme. Literally giving me the finger,” wrote the seller.

“1-0, 2-0 soon,” shows the screenshot Aner shared on his blog post.

What is friendly fraud?

Aner, who usually sells his product to businesses, told Cybernews that this was the first time he had been deceived like this, especially given that the person did not even try to hide what they did.

The man added that he doesn’t deal that much with individual customers, as his focus is on business-to-business sales. He explained that the situation hit him emotionally, as he sees his customers as people who buy from him to enjoy this niche craft rather than those who try to profit from it.

“This guy basically made fun of me. He was laughing [because] he managed to get away with it,” said Aner.

Friendly fraud, also known as chargeback fraud, occurs when a buyer purchases an item and later disputes the charge, claiming the purchase was unauthorized or that they didn’t receive the item, even though they did.

This way, they get to keep the item and also receive a refund.

Is Stripe silently ignoring the problem?

Even though Aner admitted there was nothing much to be done in this case, as the dispute couldn’t be reversed, he at least hoped that reporting the buyer to Stripe would help prevent it from happening again.

However, the company didn’t respond in the way he expected.

“They don’t use evidence of chargeback abuse from one merchant to create cross-merchant fraud signals, or to take action against the customer’s card, email, or other details for other merchants,” Aner wrote in his blog.

Even though the man understood that the company can’t block someone across the whole Stripe system for having a dispute with one merchant, he noticed that Stripe was also too quick to dismiss the issue altogether.

A Stripe engineer who works on the company’s AI-powered fraud-prevention tool, Radar, also joined the discussion after Aner shared the issue on Hacker News.

While the person explained that the company is working to develop new solutions to fight friendly fraud, in reality, it seems sellers are left to fend for themselves.

One way they can do this is by blocking the buyer from purchasing in the future. However, the practice shows that scammers find ways around these blocks.

Perhaps the way out is to stop using Stripe and look for an alternative?

This isn’t exactly ideal, notes Aner, who has been using the company’s services since the beginning. Despite the situation he is in, the seller said that the company is good at what it does.

Stripe provides businesses with financial infrastructure for their websites. It’s also one of the most popular payment processing companies, with more than 5 million websites using it.

However, their popularity and the lack of competition “make [the company] kind of complacent,” the man said. So, while the company understands that some merchants are upset over these chargebacks, they would still keep using Stripe.

Not Stripe’s problem?

Due to this situation, Aner has lost around €100 ($116). The businessman believes that if not stopped, the buyer might be encouraged to try to get something more expensive next time.

“Payment providers like Stripe operate within card network rules where issuers decide disputes,” shared Jarrod Wright, the head of marketing at Chargebacks911, a chargeback and fraud management platform.

According to the expert, a payment service provider processes payments and submits merchant evidence, but doesn’t have a say in such fraud cases.

“Even when abuse is suspected, pursuing individuals is a separate legal process that is expensive, slow, and varies by jurisdiction,” explained Wright.

“As a result, disputes are handled through issuer-led systems, and merchants’ strongest leverage is the quality of evidence and preventing issues from escalating into formal chargebacks.”

Aner said there’s no way to report a scammer to the authorities, especially if you’re shipping internationally and don’t know whether to follow the procedures in the country you’re in or the one where the buyer is from.

The situation also made the man see the need for “a cooperative network of merchants” who could help one another and build a community.

However, until then, it seems that the procedures for dealing with friendly fraudsters are still in the early stages.

Cybernews has contacted Stripe for additional comments.

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