Fraud vs customer (dis)satisfaction
/As a former cybersecurity and fraud practitioner, I’m well aware of the trade offs between a frictionless client experience and protecting those clients from fraud. That’s why it’s unnerving when confronted with unnecessary friction improperly blamed on “fraud prevention”.
I recently found this with Verizon Wireless. Significant force (me), meet unmovable object (them). I’m sure they think they “won”. They really just lost a customer.
I’ve had various Verizon wireless accounts for many years, including one for my mom’s cell service. Verizon pushed “auto-pay”, in which they would either have unlimited access to withdraw money directly from my bank accounts (people really let them do that?) or simply charge my credit card in advance for mom’s monthly bill. All was fine until I noticed an old Verizon charge labeled “equipment”. That seemed odd as we bought her unlocked phone elsewhere and brought it in. I called Verizon customer service for help.
Enter the dreaded “try to talk to a human” problem. The automated “IVR” that answered wasn’t going to let just anyone sit on hold; they needed me to prove my worth to get in the queue. But their tech didn’t work. It said the phone number I entered was not a Verizon wireless number and hung up. Several attempts proved that simply re-entering a correct phone number wasn’t going to convince them otherwise.
I decided the best way to get their attention was to contest the charge until they explained what “equipment” we bought. Two things happened in rapid succession: the credit card company misunderstood and contested 4 Verizon charges. 15 minutes later, with no help from the unreachable Verizon support, I deduced the “equipment” was actually a mislabeled service fee. Less than 20 minutes after contesting the charge(s) I called the credit card company and canceled all disputes.
At no time was Verizon paid late. These were charges in the past and a prepaid account.
That didn’t matter. Verizon has an algorithm that says multiple disputes must be “fraud” and, apparently, the fact that the disputes were all canceled immediately must somehow be more evidence of fraud.
Verizon responded by sending a text and email saying that my payment method on file wasn’t valid. I assumed that Verizon wanted a different card. Not so simple. They hadn’t just decided that the uncontested charges for which they had already been paid were “fraud”. No, they were “FRAUD!” The result of which was the account was put in “cash only” mode. I finally got an agent, who assured me he would have it reviewed. A day later, another set of messages, repeating that we still had an invalid payment method. Another long wait to chat with someone else and I was told there is no way out. Once in “cash only” always in “cash only”.
“Can I give you a different credit card?” Nope. “OK, can we turn off auto-pay and you just bill me since I already pay each month in advance of the service “ Nope, cash only. “Can I prepay for a year’s worth of service, in advance, and have a big credit?” Nope.
“What CAN I do?”, I asked in frustration. “You have always gotten paid in advance of the billing period. There are no outstanding disputes. I just want to minimize the inconvenience for my mom.” Verizon said mom or I would have to go to a Verizon wireless store once a month, forever, and bring cash to pay for that month only. Really?
As if that wasn’t enough, they then offered another “solution”. I could buy Verizon gift cards at WalMart and load them into my account each month.
Those who never worked alongside a fraud team might not realize the effect that the words “gift cards” have. Scammers often ask people to provide gift cards as untraceable payment that can’t be reclaimed. The suggestion that I purchase and provide gift cards in the name of fraud prevention made me check that my chat session hadn’t been hijacked. It hadn’t. Sigh.
So there it is. In the name of FRAUD prevention, Verizon wanted me to walk into a store once a month forever and hand them a bag of bills with a dollar sign on it, or buy untraceable gift cards. Somehow that prevents FRAUD more than my just giving them a year’s worth of money in advance. All because we had a set of charges that were long since paid and nobody was contesting.
There was another solution, of course, involving a store visit. This only took a single trip. That store had a sign which read Tmobile. They happily ported the phone number over, gave my mom a discount, and took a credit card. Apparently, over 35000 other Verizon wireless customers also “voted with their feet” to leave last quarter. Tmobile is expected to report a gain in subscribers.
I’m all for protecting accounts, but when arbitrary rules declare FRAUD on charges that are fully prepaid and uncontested, that’s a mistake. The mistake is compounded when there aren’t adults who can intervene in clearly erroneous decisions. It’s compounded further when the solution to their error is to inconvenience their customer by demanding a monthly cash payment in person. It becomes patently absurd to say that gift cards are a solution to prevent fraud. I don’t know any fraud professional who has ever recommended gift cards as a solution to any problem. This was a bad business decision, blamed on fraud rules.
Poorly designed rules increase friction to the point that long-time customers become your competitor’s loyal customer. Blaming poor processes on fraud policies is also why security teams get a bad rap. All in the name of preventing a FRAUD risk that doesn’t exist.