Fighting Friendly Fraud in Medical Practices - and How to Win More Chargebacks.

Digital payments have transformed the way medical practices operate. Online bill pay, automated recurring payments, and faster checkout experiences have made it easier for patients and staff alike. But with this convenience comes a growing challenge: friendly fraud, also known as chargeback fraud.

While many providers think of cybersecurity threats or stolen cards when discussing payment risk, a significant portion of financial loss in healthcare now comes from legitimate patients disputing legitimate charges. Understanding how friendly fraud happens — and knowing how to prevent it — is critical for protecting your practice’s revenue.

Understanding Friendly Fraud in Healthcare

Friendly fraud occurs when a patient completes a valid transaction but later files a dispute with their card issuer, claiming the charge is incorrect or unauthorized. Unlike traditional fraud, the patient or cardholder is real; the question becomes why they chose to reverse a legitimate payment.

In medical and dental settings, this can show up when patients don’t recognize how your practice appears on their bank statement, misunderstand no-show or cancellation policies, dispute charges tied to card-on-file agreements, or attempt to avoid paying for treatments they received. In family accounts, one member may simply forget someone else authorized a charge.

Regardless of the reason, the result is the same: financial loss for the practice, administrative work for your staff, and an increased risk score with processors.

Industry reports show that nearly half of all chargebacks are classified as friendly fraud. And with cardholders increasingly choosing to dispute charges through their bank rather than contacting the provider directly, the problem continues to grow.

How Medical Practices Can Prevent Friendly Fraud

Reducing chargebacks begins with clarity, consistency, and strong payment practices.

One of the most important steps is making sure patients can easily recognize your charges when they appear on their statements. Many disputes occur simply because the billing descriptor is unclear or abbreviated. Ensuring your descriptor includes your full practice name, or even dividing your billing across multiple merchant IDs when you have multiple specialties or departments, can drastically reduce confusion.

Equally important is setting expectations early. When patients check in, make an appointment, or pay online, your systems should present clear explanations of your financial policies — including any deposits, cancellation rules, or non-refundable fees. Requiring patients to actively acknowledge these terms, whether through a signature or a digital “click-to-agree” step, significantly reduces later disagreements.

Authentication also plays a key role. Using security features such as CVV and AVS checks, two-factor verification for online payments, and documented card-on-file consent helps ensure that the person authorizing the payment is the rightful cardholder. These tools build a strong record that supports you if a dispute arises.

Finally, easy access to support can prevent unnecessary chargebacks. When patients have questions about a charge but can’t reach your billing department, they often default to calling their bank. Offering a dedicated billing number, responsive email, or online help option can resolve most concerns before they escalate into disputes.

Winning More Chargebacks When They Occur

Even with the best prevention efforts, medical practices will still encounter some chargebacks. The key to winning them is preparation.

Every practice should have a clear plan for receiving, reviewing, and responding to chargeback notifications. Team members should know who handles documentation, who contacts the patient if necessary, and how quickly evidence must be submitted.

Good documentation is your strongest asset. Maintaining accurate records of the transaction, any intake forms, signed authorizations, appointment history, treatment notes, and communication with the patient will help show the charge was valid. When responding to a dispute, your evidence should directly address the patient’s claim. For example, if they allege a duplicate charge, you must provide a full payment history rather than general proof of service. Precision and relevance matter more than volume.

Timeliness matters as well. Dispute windows are short, and delayed responses reduce the likelihood of recovering your funds.

A More Secure Payment Experience for Medical Practices

Friendly fraud can create significant financial strain for healthcare providers, but it is manageable with the right systems and processes. When your billing descriptors are clear, your policies are transparent, your authentication is strong, and your support is accessible, patients have fewer reasons — and fewer opportunities — to initiate disputes.

PayLow Pro reinforces these protections with built-in fraud prevention tools, detailed transaction records, and seamless integrations with leading practice management systems. And with Dual Pricing, practices can eliminate traditional processing fees altogether while still offering patients a smooth, compliant payment experience.

Friendly fraud may be common, but it doesn’t have to cost your practice. With the right strategy, you can prevent more disputes, win more chargebacks, and safeguard your revenue year-round.