Fraud fight can’t wait on government, says Merchant Advocate founder Eric Cohen

The Federal Reserve, the Federal Trade Commission, and the U.S. Treasury Department have formed a joint roundtable to combat payment fraud, but Eric Cohen argues that merchants cannot afford to wait for policy to trickle down. For high-risk businesses, the message is simple: fraud prevention and dispute management have to happen at the point of sale, not after the chargebacks start piling up.

1. The new federal roundtable is a signal that Washington recognizes the scale of payment fraud, but Cohen says government initiatives move at the speed of bureaucracy while fraud moves at the speed of light. In other words, merchants dealing with rising fees and chargebacks need controls they can use now, not after a long policy cycle.
2. Cohen says a large share of current fraud losses comes from friendly fraud, when customers mistakenly or deliberately dispute authorized charges. His first fix is basic but effective: make billing descriptors readable. If the bank statement shows a cryptic corporate acronym, the customer is more likely to hit dispute; the descriptor should clearly show the public-facing brand name, website, or phone number.
3. He also points to customer communication as a low-tech defense that still works. Instant automated order confirmations and detailed tracking information reduce confusion, while real-time transaction monitoring can flag anomalous buying patterns before a transaction clears. That matters because once the payment is accepted, the cost of cleaning up the mess is higher.
4. When a chargeback does land, Cohen says merchants should treat dispute management as revenue recovery, not as a nuisance to be ignored. He recommends organized evidence packs with proof of delivery, IP addresses, matching billing and shipping ZIP codes, and signed contracts or customer service logs. For merchants and PSPs, this is also account-protection work: high chargeback ratios can put the merchant account itself at risk.

Eric Cohen is the founder and CEO of Merchant Advocate, an industry consulting firm based in Hoboken, New Jersey, that advises merchants on working with credit card processors. For high-risk operators, that makes his point especially practical: fraud strategy is not a compliance seminar; it is part of keeping processing alive.