One Weird Trick to Get Your Credit Card Charge Reversed? Fraud.

Summary

Podcast Summary: “One Weird Trick to Get Your Credit Card Charge Reversed? Fraud.”

Everybody’s Business (Bloomberg + iHeartPodcasts)
Original air date: August 11, 2026
Episode guest: Amanda Mull (Bloomberg Businessweek)
Host: Sarah Holder (from The Big Take, Bloomberg)

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Episode Overview

This episode explores the rising tide of credit card chargebacks — from simple misunderstandings to outright fraud — and the shifting dynamics between consumers, banks, and retailers in handling these disputes. Amanda Mull shares deep insights into the psychology fueling chargeback trends, the technological and monetary burden on merchants and banks, and what this phenomenon says about trust, power, and frustration in the contemporary economy.

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Key Discussion Points & Insights

1. What is a Chargeback and Why Are They Increasing?

• Definition:
  A chargeback is when a consumer disputes a charge with their credit card issuer, potentially reversing a transaction.
  “It is when you go to your credit card issuer and go, hey, there’s a problem with this transaction, or I didn’t buy that, or I don’t recognize this, I want you to reverse the charge. I’m not paying for this.” — Amanda Mull (02:00)

• Sharp Rise in Disputes:
  From 2021 to 2025, U.S. chargebacks rose by 29%; globally, by 46%.
  “Some of that is due to a greater number of credit card transactions overall. But most of that is because people are disputing more transactions for a variety of reasons.” — Amanda Mull (02:19)

• Common Triggers:

  • Misunderstandings (so-called "friendly fraud")
  • Sneaky subscriptions and recurring charges
  • Convoluted or intentionally confusing retailer policies
  • Genuine delivery or service failures
    “It’s a consumer environment where you feel like you have less and less purchasing power, less and less ability to, like, talk to another human about a problem you’re having. So people look for ways to get back at retailers.” — Amanda Mull (01:40)

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2. Friendly Fraud & the Psychology Behind Chargebacks

[04:04 – 06:28]

• Friendly Fraud Explained:
  Consumers often do not recognize online transactions because third-party app purchases show up under cryptic names, leading to disputed charges.

  • Examples include:
    • Teenagers using parents’ Apple Pay without knowledge
    • Subscriptions automatically continuing after a free trial
      “What they show up as on your credit card statement is sort of anybody’s guess.” — Amanda Mull (04:16)

• Ease of Filing:
  Disputing a charge can be as simple as pressing a button on a banking app. Lower-dollar disputes are often automatically refunded to keep customers happy and because investigating is too costly. “If it's like, if you’re disputing $7 on the app store... that’s probably just getting refunded.” — Amanda Mull (06:00)

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3. Not-So-Friendly Fraud: Intentional Abuse

[06:28 – 08:52]

• Emerging via Social Media:
  Younger consumers spread tips online — especially on TikTok — about fraudulently disputing charges to get free goods. “TikTok is a place where young people go sometimes invent classic types of fraud from first principles. … There’s a lot of people on various social platforms telling you … do a chargeback.” — Amanda Mull (06:41)

• Motive:
  Some are driven by a sense that companies are scamming them, via “shrinkflation,” hidden fees, and removing human customer service. “It feels like you are being as a consumer shunted into a system designed to keep your money… even when something has gone wrong.” — Amanda Mull (07:45)

• Temporary Gain, Long-Term Consequences:
  Banks can close consumers’ accounts if they file chargebacks excessively or fraudulently, affecting their credit and ability to transact. “You might get a couple things that way… but banks also… will close your account if you are doing it in a really egregious way.” — Amanda Mull (08:52)

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4. Legal and Practical Hazards

[09:18 – 10:40]

• Legal Risks:
  Filing a knowingly false chargeback is illegal. “It is illegal to claim that you were a victim of that crime in order to gain a financial advantage over a merchant.” — Amanda Mull (09:26)

• Institutional Response:
  Large retailers and banks can restrict access, shut down accounts, and even report egregious fraud to law enforcement.
  Airlines, hotels, and platforms like Amazon may also permanently ban abusers.

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5. Impact on Merchants

[12:51 – 14:53]

• Large Merchants:
  Treat chargebacks as another operational cost, using third-party vendors (often AI-powered) to sort genuine disputes from fraud.
  “A lot of them have engaged third party vendors, specialists who have particular like AI capabilities to separate the wheat from the chaff in these complaints.” — Amanda Mull (13:05)

• Small Merchants:
  Suffer direct hits: banks charge a penalty (commonly $15+) per chargeback, even if the dispute is resolved in the merchant’s favor.
  “If someone files a chargeback against you as a merchant, you were getting charged the chargeback penalty by the bank. Even if you win the dispute. That’s $15, let’s say, out the door immediately.” — Amanda Mull (14:59)

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6. Banks’ Role and Response

[15:17 – 16:23]

• Banks also employ sophisticated tech to filter out frivolous and serious disputes, balancing customer care with cost.
• Chronic chargeback users risk having accounts summarily closed, especially if activity hints at criminal intent.
• Processors scrutinize merchants with high dispute rates, raising their fees and risk levels.

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7. The “Chargeback Economy” as Economic Signal

[16:23 – 17:37]

• Alarming Scale:
  Hundreds of millions of annual disputes, siphoning substantial sums into a gray area — neither outright fraud nor legitimate.
• Deeper Implications:
  The surge reflects growing distrust and confusion in commerce, hastened by automation and less human interaction. “It is just like, another indicator of trust that undergirds a lot of elements of living in a functional society is breaking down.” — Amanda Mull (16:38)
• A breakdown in consumer trust can incite both merchants and customers to act less ethically, eroding commercial relationships overall. “It makes us a little bit less trustworthy to each other. And I think it motivates people to act in untrustworthy ways.” — Amanda Mull (17:17)

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Notable Quotes & Memorable Moments

• "You might get a couple things that way... but overall, banks... will close your account if you are doing it in a really egregious way." — Amanda Mull (08:52)
• “If you file a chargeback against Delta or against United, they might decide not to do business with you in the future. The same is true of hotels.” — Amanda Mull (09:36)
• "We have sort of, I think, lost a sense of, like, who it is we’re dealing with and that, you know, whether or not there actually is a human on the other end of that transaction." — Amanda Mull (16:44)

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Timestamps of Key Segments

• [01:29] — Why consumer distrust is rising
• [02:19] — Chargebacks on the rise: stats and reasons
• [04:16] — How “friendly fraud” works and how consumers get confused
• [06:28] — Not-so-friendly fraud, TikTok hacks, and rationalizing scams
• [08:48] — Institutional consequences for frequent abusers
• [09:26] — Legal realities of fraudulent chargebacks
• [12:51] — Chargeback impact on large vs. small merchants
• [15:17] — How banks triage disputes and root out fraud
• [16:38] — What the chargeback boom signals about trust in the economy

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Tone & Takeaways

The conversation is smart, clear-eyed, and accessible, mixing relatable anecdotes, dry humor, and data-driven insights. Amanda Mull’s reporting highlights how consumer desperation and retailer policies can spiral into mutual suspicion — with real economic costs and ethical quandaries.

“It’s a consumer environment where you feel like you have less and less purchasing power... so people look for ways to get back at retailers.” — Amanda Mull (01:40)

“It motivates people to act in untrustworthy ways.” — Amanda Mull (17:17)

Whether you’re a consumer, merchant, or just interested in the new rules of digital commerce, this episode delivers a nuanced, lively, and useful portrait of our increasingly adversarial chargeback economy.

Transcript

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[Podcast Host]

Everybody's Business Today, we're sharing an episode from one of our favorite Bloomberg podcasts, the Big Take. This episode is about friendly fraud and the uptick in credit card chargebacks. It features our Business Week colleague and friend of the show, Amanda Mull. And Stacy and I will be back with a new episode of this podcast, Everybody's Business, on Friday.

[Optum Representative]

Bloomberg Audio Studios Podcasts Radio News Amanda

[Sarah Holder]

Mull has been covering retail for years. She's tracked the demise of American malls, the explosion of fast fashion brands, and recently a growing sense of distrust between customers and merchants.

[Amanda Mull]

People feel like they're being scammed left

[Sarah Holder]

and right, sneaky subscription services that are hard to get out of, restrictive return policies, products that just don't meet expectations.

[Amanda Mull]

It's a consumer environment where you feel like you have less and less purchasing power, less and less ability to, like, talk to another human about a problem you're having. So people look for ways to get back at retailers.

[Sarah Holder]

One of those ways is something called a chargeback, essentially disputing a credit card transaction.

[Amanda Mull]

It is when you go to your credit card issuer and go, hey, there's a problem with this transaction, or I didn't buy that, or I don't recognize this, I want you to reverse the charge. I'm not paying for this.

[Sarah Holder]

Pushing back on a credit card charge isn't new, but Amanda found that it is happening more and more and more.

[Amanda Mull]

From 2021 to 2025, the rate of chargebacks in the US rose about 29%, and worldwide it rose about 46%. So some of that is due to a greater number of credit card transactions overall. But most of that is because people are disputing more transactions for a variety of reasons,

[Sarah Holder]

reasons that range from the

[Amanda Mull]

legitimate Hey, I ordered this thing online. It never showed up. Yeah, they are not giving me a refund, but I didn't receive the product.

[Sarah Holder]

To the deceptive, yeah, I bought this,

[Amanda Mull]

but I don't want to pay for it. So I'm going to tell the bank that it was fraudulent, that it never arrived, that there was an issue with it. So I will just get this for free.

[Sarah Holder]

I'm Sarah Holder and this is the big take from Bloomberg News. Today on the show how the rise of chargebacks is putting merchants on the defense and pulling banks into the fray. And what this growing trend says about shopper psychology and the health of the economy overall. For consumers, filing a chargeback can feel like a quick and easy path to getting a refund. But behind the scenes, a, it actually triggers what can be a long and complicated process.

[Amanda Mull]

The bank goes to the merchant and goes. You have a transaction dispute, it charges them a fee, which can be, you know, 10, 15, $20, depending on the situation, depending on the vendors involved. And the bank investigates. The bank goes, okay, merchant, do you have a tracking number? Do you have shipper information? Can we contact the shipper? And then a lot of times for a very inexpensive transaction. On the other end of the spectrum, the bank may look and go, okay, you can have your $20. It's going to cost us $20 of labor to even start to look into this. So, like, we're not worried about it.

[Sarah Holder]

Okay. So the rate of these chargebacks is increasing. And you looked at some of the reasons why. The biggest example being chargebacks that begin with a simple misunderstanding. What you call friendly fraud.

[Amanda Mull]

Yeah. So you've bought something as a consumer in what the banking industry calls card not present transactions. So that's like all of online shopping. Plus things that, like, feel not so much like online shopping, but actually are, which is like ordering an Uber ordering doordash, like any, anything you use an app for that. Like, even if it summons something in real life, that is a card not present transaction. If you let your teenager put your card in Apple Pay and they start using it for stuff, because card not present transactions tend to bounce through a lot of, like, payments vendors in third parties. What they show up as on your credit card statement is sort of anybody's guess. So you, you might look at all of those things and go, I don't recognize any of these names who spent $50 on the app Store. Like, not me. Like, why would I do that?

[Sarah Holder]

And you're like, where did that charge come from? I need to dispute that charge.

[Amanda Mull]

And then there's also the issue of subscriptions. A lot of retailers will include seven days free or one month free, and then a recurring $12 every month that you may agree to. And like, it's a legitimate transaction in a legal sense. But like, you missed that it was put in a place where like, it was designed for you to miss it.

[Sarah Holder]

Or you sign up for a free. You forget to cancel. But you meant to cancel, right?

[Amanda Mull]

You meant to cancel and you look at your credit card statement and it feels like someone has stolen money from you.

[Sarah Holder]

Yeah.

[Amanda Mull]

So all of these transactions are disproportionately likely to be subject to chargebacks, when in reality none of those are fraud.

[Sarah Holder]

Chargebacks have become really easy to file. Many banking apps have a button that lets you dispute a transaction. Consumers can often feel it's worth a try given that low barrier to entry and, and the high likelihood of getting a refund on a low dollar transaction.

[Amanda Mull]

Especially if you have a premium credit card that's sort of like baked into the service where it's like, okay, if it's like, if you're disputing $7 on the app store that you don't think you bought, like, that's probably just getting refunded. The credit card wants to keep you happy. And also, like, it is a very labor and time intensive process to investigate credit card transaction disputes. So if below a certain dollar amount, and that can vary across card issuers, they just decide that, like, hey, we're just gonna honor these.

[Sarah Holder]

So you also talked about this other category of chargebacks where people are basically intentionally using them to get free stuff.

[IBM Representative]

Yes.

[Sarah Holder]

Talk about this not so friendly fraud. How prevalent is this and how does it work?

[Amanda Mull]

Well, it's growing in prevalence. I would say what you see with this type of intentional sort of malfeasance is generally younger consumers, you know, TikTok is a place where young people go sometimes invent classic types of fraud from first principles. And this is another one. You know, TikTok tries to take these down as they come up, but there's a lot of people on various social platforms telling you that like, oh, if you're like upset with how long shipping is taking, do a chargeback. If you're upset with how long it's taking them to like approve your return, do a chargeback.

[Sarah Holder]

A weird trick to get your money back is fraud. Fraud.

[Amanda Mull]

Yeah.

[Sarah Holder]

But what you're describing is that, you know, in part this could be a nefarious impulse to get one over on a retailer. And in part it's responding to this feeling that consumers have that, you know, inflation is rising, companies are shrinking the size of their products and charging the same price. There is this feeling among consumers, I think, that they're getting scammed.

[Amanda Mull]

Whether or not those scams are legally actionable, having subscription fees baked into everything in a way that like, is constantly surprising and that is hard to opt out of is like a bad consumer experience. It feels like being stolen from. Even if you as a company, you as a merchant followed the letter of the law, like getting rid of your customer service agents in order to divert everybody to an AI bot that like can't answer specific questions about non standard policy issues. Like that feels like you are being as a consumer sort of shunted into a system designed to keep your money even when something has gone wrong and you deserve some sort of redress or just want to talk to a person, like when you are spending your paycheck like you were supposed to have some sort of power in those transactions, like that, the American system is designed to tell you that that is where you assert yourself. And if it gets harder and harder to do that and things get more and more misleading and you feel like you don't have options for redress, you can see how people justify just reversing transactions.

[Sarah Holder]

Yeah, using the chargeback as a way to claw back that power.

[Amanda Mull]

And you might get a couple things that way. Like you, you might get a couple free T shirts, free app store stuff, but like overall, banks also, you know, card issuers look at who is filing a lot of chargebacks and they will close your account if you are doing it in a really egregious way. I don't think it's beyond the horizon of possibility that they will, you know, report you to law enforcement if they think you're doing it in felonious way.

[Sarah Holder]

And to be clear, because this is illegal, it is illegal to erroneously file a charge back when you have not been defrauded.

[Amanda Mull]

Yes, it is illegal to claim that you were a victim of that crime in order to gain a financial advantage over, over a merchant.

[Sarah Holder]

Yeah, hear that? Hear that kids?

[Amanda Mull]

Yeah, it's illegal. You know, there's a variety of consequences that can happen because of this. Like you can have your credit card closed which will ding your credit report, like will be in bad standing with that financial institution. And then also depending on like where you're doing the chargebacks, like they might decide that they don't want you as a customer anymore. You know, people get very mad at airlines and whether or not a service was rendered as promised is sort of in the eye of the beholder when it comes to the travel industry, the hospitality industry. But if you file a chargeback against Delta or against United, they might decide not to do business with you in the future. The same is true of hotels. Like if you are filing like a lot of chargebacks against these large businesses that have reason to suspect that you are filing them in a punitive way instead of because of a real issue, like they can choose to close your account, they can choose to ban you from their service like you can get banned from Amazon. People who do this a lot often have their purchasing options curtailed in certain

[Sarah Holder]

ways after the break. The consequences of the chargeback craze for retailers, banks and society.

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[Sarah Holder]

so we've talked a lot about consumer psychology here, but I want to also talk about what this all means for merchants. What has the rise of chargebacks meant for these companies, either the big retailers like Amazon or the small businesses that are experiencing this.

[Amanda Mull]

For big retailers, big companies, big merchants, to a certain extent, they're just going to roll it into the overall price levels that they charge, like it is the cost of doing business. A lot of them have engaged third party vendors, specialists who have particular like AI capabilities to separate the wheat from the chaff in these complaints and like figure out which ones they actually need to deal with versus which ones they can sort of IGN or, or just ban that customer or something like that.

[Sarah Holder]

So third party companies that work with them to identify chargeback fraud, identify chargeback

[Amanda Mull]

fraud and to sort of do the work of like gathering evidence and presenting a case to the bank and like trying to sometimes reach out to the customer and figure out if there's a way to come to a understanding before, you know, things go further. Because if retailers incur too many chargebacks, like that is a problem for them. Payment processors don't want to work with companies that incur a lot of charge. That makes you a high risk merchant. And it means that you were going to have to pay higher transaction fees to credit cards and it means that you were going to have to keep larger cash balances in escrow to deal with disputes that come up.

[Sarah Holder]

These merchants are hiring these third party actors. How much is that costing them?

[Amanda Mull]

It costs a lot of money for a lot of vendors. There's going to be a per investigation fee and then there's like the sort of general retainer and like the onboarding a vendor into your very large business is always quite expensive. I don't have like a specific number because it really depends on the size of the business, the suite of services. But it is, it is an enormously expensive thing because chargebacks are enormously expensive. If you lose a chargeback that you shouldn't have lost as a merchant, you're out the penalty, you're out the revenue, and you're out the product or the time.

[Sarah Holder]

So it's expensive to fight chargebacks, but not as expensive as it is to lose a chargeback claim.

[Amanda Mull]

Yes. For small merchants, the impact is more direct. If someone files a chargeback against you as a merchant, you were getting charged the chargeback penalty by the bank. Even if you win the dispute. That's $15, let's say out the door immediately.

[Sarah Holder]

And what about banks? What does it mean for banks? To be sort of in the middle of this negotiation, this tug of war, how are they responding to the rise of the chargeback?

[Amanda Mull]

Sort of like merchants, they are employing a lot of, like, new types of technology to sort of, like, figure out which are the disputes that they need to focus on, that deserve manpower, that deserve an actual investigator. Which ones are the ones that they can, like, deny pretty quickly, and which ones are the ones that they should go ahead and probably approve pretty quickly. There's various types of technology, various types of vendors that do that as well for banks. And then really, your recourse as a bank, if you're not going to refer someone to law enforcement, if it's not a situation where there's like, a massive scale of these fraudulent chargebacks, then if someone is abusing the system and creating a lot of work for you as a bank in a way that looks like probably, like, potentially criminal activity, then you can just close their account. And then, like, the payment processors also are trying to identify bad actors on the merchant side. A company that is constantly being disputed is probably doing something that, like, makes you not want to associate with them as a processor.

[Sarah Holder]

Help me understand how big of a deal this phenomenon is. Like, is this something that's a warning sign about our economy writ large, that all this money is flowing into this chargeback economy, that trust between consumers and merchants is breaking down like this?

[Amanda Mull]

I think it is a big deal. Like, I think that the financial implications for it, especially for small businesses, like, are a really big deal. We're talking about, like, hundreds of millions of transaction disputes. It is a really large number annually, and that's a lot of money that is sort of being sucked into this, like, weird gray area of, like, maybe it is involved in fraud, maybe it is not. But it's an indicator that, like, our interactions with the economy have gotten more confusing and more stressful. And more broadly, I think it is just like, another indicator of trust that undergirds a lot of elements of, like, living in a functional society is breaking down. Like, we have sort of, I think, lost a sense of, like, who it is we're dealing with and that, you know, whether or not there actually is a human on the other end of that transaction. And it makes us a little bit less trustworthy to each other. And I think it motivates people to act in untrustworthy ways.

[Sarah Holder]

This is the big take from Bloomberg News. I'm Sarah Holder. The show is hosted by me, David Gura and Juan Ha. The show is made by Sean Carter, Aaron Edwards, David Fox. Jeff Grocott, Paddy Hirsch, Rachel Lewis, Kriskell Emma Munger, Laura Newcomb, Naomi Ng, Julia Press, Tracy Samuelson, Naomi Shaven, Victor Sweezy, Alex Sugiura, Julia Weaver, Yang Yang, and Taka Yasuzawa. Our Executive producer is Nicole Beemsterboer. To get more from the Big Take and unlimited access to all of bloomberg.com, subscribe [e-mail] podcastoffer if you like this episode, make sure to subscribe and review the Big Take. Wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back on Monday.

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