Point S UK is urging workshops to remain vigilant following a rise in chargeback fraud, as repeated cases could lead to them losing their merchant accounts. Fraudsters are less likely to target garages with robust payment processes.
Rise in Chargeback and Friendly Fraud Targeting Garages
Point S UK is urging independent garages to be vigilant following a significant rise in chargeback fraud. This is a deceptive practice that is increasingly targeting automotive service businesses nationwide.
Customers commit “friendly fraud” by making a legitimate booking, paying by card and having the work completed. They then contact their bank to reverse the payment. This practice now accounts for an estimated 80% of all chargebacks, and several members of Point S UK have already experienced it.
Chargeback Fraud Risks and Financial Impact on Workshops
Independent garages face multi-layered financial damage. 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. What’s more, in the most serious cases they can lose 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.
Strengthening Payment Processes to Prevent Fraud
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.”
