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  3. Friendly Fraud & Chargeback Fraud

How do friendly fraud and chargeback fraud differ from true fraud?

True fraud occurs as the result of the acceptance of a stolen payment card. When a cardholder is the victim of true fraud, the issuer typically closes the account and issues a new card and account to the cardholder.

Chargeback fraud and friendly fraud do not occur as the result of the stolen payment card. Instead, the legitimate cardholder knowingly participated in and authorized the transaction being disputed.