Point S warns independent workshops of rise in “friendly fraud” cases
Workshops urged to remain vigilant following increase in chargeback fraud, with those affected at risk of losing merchant account entirely
Garages with robust payment processes less likely to be targeted
“Every workshop should be aware of the risk and take the necessary steps to protect their business and their margins.” - Ali Yilmaz, Point S UK Managing Director
Point S UK is urging independent garages to be vigilant following a significant rise in chargeback fraud, a deceptive practice that is increasingly targeting automotive service businesses across the country.
Also known as “friendly fraud”, the scam involves a customer making a legitimate booking, paying by card and having work completed, before contacting their bank to reverse the payment. The practice now accounts for an estimated 80% of all chargebacks and Point S UK is aware that several of its members have already been affected.
For independent garages, the financial damage is multi-layered. A successful chargeback reverses the full cost of parts and labour, while banks typically charge around £28 plus VAT for every disputed transaction. Businesses also face the administrative burden of challenging the claim, a time-consuming process that diverts resources away from day-to-day operations.
Garages whose chargeback rate consistently exceeds 1% risk higher card processing fees or, in the most serious cases, losing their merchant account entirely.
Fraudsters actively target businesses they perceive as having weaker payment controls, making the review and strengthening of internal procedures one of the most effective deterrents a garage can deploy.
Point S UK is encouraging workshops to seek specialist advice on how to best safeguard their payment processes. By staying vigilant and updating procedures, garages can protect their margins, reduce exposure to fraudulent claims, and ensure they remain a secure environment for genuine customers.
Ali Yilmaz, Managing Director of Point S UK said: “This is a growing threat that independent garages cannot afford to ignore. Fraudsters are opportunistic. Businesses that are seen to have robust payment procedures in place are far less likely to be targeted. Every workshop should be aware of the risk and take the necessary steps to protect their business and their margins.”