Buyer-beware scams are on the rise, but businesses are also falling victim to friendly fraud, where customers reverse charges on purchases.

Customers can dispute transactions, claiming they were tricked or defrauded, leading banks to withdraw funds from the merchant’s account.

Businesses, especially those dealing in precious metals, are at risk of losing money to chargeback fraud.

Banks may allow chargebacks for unauthorized transactions, billing errors, fraudulent activity, or failure to receive goods or services.

Wire transfers are more complex to reverse, with banks often siding with consumers in cases of alleged fraud.

If a bank reverses a wire transfer, it’s difficult to undo. Respond promptly to fraud claims with evidence like receipts to support your case.

Options after a reversal include disputing it, filing a police report, seeking legal action, or consulting with the bank.

To prevent future issues, enhance due diligence processes for high-dollar sales and consider AI-based fraud prevention software.

Training staff to identify suspicious purchases and report potential money laundering can also help protect against friendly fraud.

Stay informed with Moneywise for the latest financial news and tips. This article serves as information only and not as advice.

Read more at Yahoo Finance: I sold $3K in gold via wire transfer, but then the buyer got their bank to reverse the payment. What can I do?