Family fraud happens when a cardholder disputes a legitimate purchase made by a relative — often a child, spouse, or roommate — inaccurately claiming it was unauthorized. It’s a common issue with digital goods, subscriptions, and in-app purchases. These disputes are treated like other “fraud” chargebacks even though the cardholder’s family — not a criminal — initiated the purchase. Proving legitimacy in these cases can be difficult without supporting documentation.

If your business sells products commonly used by multiple household members, it’s smart to review these patterns. AltoPay can help you identify signs of family fraud and implement solutions to prevent these invalid chargebacks from happening. Educating customers, using clear billing descriptors, and offering flexible refund policies can also help keep risk in check.

NOTE: Family fraud is a subcategory of friendly fraud — a type of chargeback that is invalid and unwarranted.