Point S UK is urging independent workshops to review their payment procedures after a significant increase in so-called 'friendly fraud' cases, which now account for an estimated 80 per cent of all chargebacks.
Independent garages across the UK are being targeted by a rising wave of chargeback fraud, and industry body Point S UK is calling on workshops to act before they become the next victims.
The practice, widely referred to as 'friendly fraud', involves a customer making a legitimate booking, paying by card and having work completed, before contacting their bank to reverse the transaction. The customer effectively receives the work for free while the garage is left out of pocket, having already paid for parts and labour.
Chargeback fraud now accounts for an estimated 80 per cent of all disputed card transactions, and Point S UK has confirmed that several of its member workshops have already been affected.
The financial impact on independent garages is multi-layered. A successful chargeback reverses the full cost of both parts and labour, but the damage does not stop there. Banks typically charge around £28 plus VAT for every disputed transaction, regardless of the outcome, and workshops face the additional burden of challenging the claim through a time-consuming process that diverts resources away from day-to-day operations.
Garages whose chargeback rate consistently exceeds one per cent also risk facing higher card processing fees or, in the most serious cases, losing their merchant account entirely — which would prevent them from accepting card payments altogether.
According to Point S UK, fraudsters are deliberately targeting businesses they perceive as having weaker payment controls. Independent workshops, which may lack the dedicated finance and administrative teams found in larger chains, can appear more vulnerable. This makes the review and strengthening of internal payment procedures one of the most effective deterrents available.
The network is encouraging its member workshops to seek specialist advice on how to safeguard their payment processes, reduce exposure to fraudulent claims and protect their margins. Businesses that are seen to have robust procedures in place are, according to Point S UK, far less likely to be targeted in the first place.
"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."- Ali Yilmaz, Managing Director, Point S UK
Point S UK is urging all independent garages to review their payment processes as a matter of priority. Key steps include ensuring that customer authorisation is clearly recorded at the point of payment, maintaining thorough job records and invoices, and understanding the chargeback dispute process so that claims can be challenged swiftly and effectively.
Workshops should also consider consulting their card payment provider to understand what thresholds apply to their account and what protective measures are available. Taking action before fraud occurs is significantly less costly than attempting to recover losses after the fact.
With independent garages already operating on tight margins, the message from Point S UK is clear: chargeback fraud is no longer a risk that can be overlooked, and the businesses best placed to protect themselves are those that take a proactive approach to their payment security.
Tagged with: chargeback fraud, friendly fraud, card payments, workshop margins, merchant account risk, independent garages, tyre and autocare, dispute fees, payment processes, Point S UK
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