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 of chargeback fraud 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.
Chargeback fraud cannot be ignored
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, including issues around chargeback fraud. 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.
“This is a growing threat that independent garages cannot afford to ignore,” commented Ali Yilmaz, Managing Director of Point S UK. “Fraudsters are opportunistic. Businesses that are seen to have robust payment procedures in place are far less likely to be targeted for chargeback fraud. Every workshop should be aware of the risk and take the necessary steps to protect their business and their margins.”
