The credit card chargeback system was initially designed to protect consumers from fraudulent transactions by providing them with a means to dispute unauthorized charges. However, the system has increasingly become a tool for illegitimate claims of friendly fraud, causing significant financial repercussions for businesses. Friendly or chargeback fraud occurs when a cardholder disputes a legitimate transaction, claiming it to be unauthorized. Unfortunately, this dishonest practice has been on the rise, with some studies estimating that 60-80% of all chargebacks are now ‘Friendly Fraud,’ which is on the rise, and small business owners may bear the brunt of this impact.
[https://www.cnbc.com/select/friendly-fraud-impact-on-small-businesses/]. A whopping 23% of consumers admitted to disputing purchases as fraud, even though they received the item and were satisfied with the purchase, according to Sift’s Q4 2022 Digital Trust & Safety Index. Cases like FNU Afrina as given below, fall under such fraudulent Friendly Frauds.
A recent case involving FNU Afrina, an alleged employee of one of the world’s leading internet search engine companies, highlights the impact of friendly credit card chargeback fraud on businesses and raises questions about the values and ethics of professionals seeking EB1A Green Cards, also known as Einstein Visas. FNU Afrina is accused of initiating an unauthorized chargeback with her credit card company after availing herself of the Next League Program offered by Next League Executive Board LLC, a coaching company based in Phoenix, AZ, for over 4 months. The Next League Program helps professionals become the best version of themselves and fulfill the American Dream by guiding them through the application process for EB1A Green Cards, which are reserved for top talented professionals.
FNU Afrina joined the program in August 2022. In December 2022, after availing of the Coaching Service for over 4 months, FNU Afrina claimed that her employer’s team had reviewed the contract and disapproved of its employees’ continued involvement in the coaching service. However, as per the notice served, Next League has established that FNU Afrina breached the covenant of good faith and fair dealing by initiating the chargeback to evade payment for services rendered between August and November 2022.
By engaging in this fraudulent conduct, Afrina has demonstrated herself to be a big paradox to the EB1A Green Card, which is reserved for top talented professionals who embody American values. This behavior is certainly not expected out of those seeking to become American citizens, and immigrants should be cautious of conducting such behavior as it can certainly hamper their immigration status and Green Card status and impact their citizenship application. This conduct has serious ramifications for professionals and their families, as it could lead to deportation as well.
As per reliable sources, Next League Executive Board LLC has initiated legal proceedings against FNU Afrina for breach of contract, cheating, and theft of services under applicable laws, and it is seeking to recover $7,500 and additional legal expenses. FNU Afrina may also be held liable for fraud, defamation, tortious interference with contract, and tortious interference with business relations due to her actions and negative statements being made about the Company and the Program.
As per our research, FNU Afrina was issued a Demand Notice by the company, requiring her to remit payment of $10,237.50 by 12:00 p.m. MST on January 24, 2023. According to the records, as available with us – FNU Afrina may further be criminally liable for theft pursuant to ARS § 13-1802, which is a class 3 felony because she took the money that is owned by Next League. However, she failed to comply and did not respond to the Legal notice. Paradoxically, there are very positive sentiments FNU Afrina seems to have made about the Next League Program on record externally as well as internally voluntarily, which are highlighted in the Demand Notice issued to her (copy available); and it looks like when she chose not to have the EB1A Green Card, she alleged discomfort after 4-month of active participation. The Next League LLC is prepared to employ all available legal remedies to recover the outstanding amount, attorney fees, and other damages. Should the company secure a judgment against FNU Afrina, it plans to enforce the judgment by garnishing her wages or attaching a lien to her property, which could have serious consequences.
While the Next League Executive Board LLC has reached out to her employer to verify Afrina’s claim on her employment status and the authenticity of the documents she submitted in relation to her employment, it serves as a cautionary tale for businesses and consumers alike about the consequences of friendly credit card chargeback fraud. Businesses must remain vigilant and proactive in preventing and addressing this issue, while consumers should be aware of the potential legal repercussions of engaging in such fraudulent practices. In case her employer advised her to withdraw from the program after four months of availing the services, then the employer would also be held liable, as the means it employed and leveraged the chargeback mechanism to withdraw from the Coaching Program for its employees is not only unethical business practice but also illegal. While the company is free to advise its employees but would it appreciate similar conduct by its customers? The company needs to answer. However, Afrina’s authenticity and claim need to be verified by her employer, as it may be possible that Afrina’s claim of putting the blame on her employer is an attempt to mask her own conduct.
Afrina was not reachable for comments, and her LinkedIn profile is locked, which is ordinarily very rare. Furthermore, Next League Executive Board LLC refused to comment on the case stating that it does not disclose the details of its students and its business transactions to maintain privacy, demonstrating its ethical business practice.
The case of Africa serves as a stark reminder of the implications of friendly credit card chargeback fraud on businesses and the potential consequences for immigrants seeking to build a life in the United States. It demonstrates the importance of adopting proactive measures to prevent and address this growing issue, including maintaining detailed records, promptly addressing customer concerns, and using fraud detection tools. Additionally, businesses can educate their customers about the appropriate use of chargeback facilities and the consequences of friendly fraud.
Under the Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA), cardholders have the right to dispute transactions if they believe there has been a billing error or fraudulent activity. However, some consumers, like Afrina, exploit these protections, wrongfully disputing legitimate charges to avoid paying for goods or services. This abuse of credit card chargeback facilities poses a significant challenge for businesses, as they must refund the disputed amount, pay chargeback fees, and potentially lose the merchandise in question. Moreover, excessive chargebacks can lead to higher processing fees or even the termination of a merchant’s credit card processing account.
In cases like Afrina, which are clear cases of irresponsible behavior, in addition to breach of contract, she is liable to the card issuer for fraud because of intentional misrepresentation being made that one is entitled to a refund of the Fee. In such cases, the credit card issuer should cancel the credit card, and the credit score should be nullified to prevent such fraudulent instances by consumers like Afrina. It is strange that highly educated professionals earning hundreds of thousands of dollars resort to such tactics to evade legitimate payments.
While the company has reached out to her employer to verify Afrina’s claim, employment status and the authenticity of the documents she submitted in relation to her employment, it serves as a cautionary tale for businesses and consumers alike about the consequences of friendly credit card chargeback fraud. Businesses must remain vigilant and proactive in preventing and addressing this issue, while consumers should be aware of the potential legal repercussions of engaging in such fraudulent practices. In case her employer advised her to withdraw from the program, then the company would also be held liable, as the means they employed and leveraged the chargeback mechanism to withdraw from the program is not only unethical business practice but also illegal. While the company is free to advise its employees but would appreciate similar behavior by its customers, the company needs to answer. However, Afrina’s claim needs to be verified by her employer.
It is indeed perplexing that highly educated professionals, part of our society earning substantial incomes, may resort to unethical tactics to avoid making legitimate payments. One of the possible explanations could be Leon Festinger’s Cognitive Dissonance Theory, which suggests that individuals experience discomfort when their actions are inconsistent with their beliefs. In the case of these professionals like Afrina, they may hold the conflicting beliefs that they are successful and responsible individuals while also wanting to avoid paying a legitimate, albeit, debt. To reduce cognitive dissonance, they resort to unethical tactics, such as chargeback fraud, to rationalize their behavior and maintain their self-image as successful and responsible. This behavior is not only contradictory but also harmful to them, and they need to be told the consequences of their actions and to other stakeholders involved in the transactions. Additionally, the following three psychological theories further explain such misconduct:
- Rationalization Theory (Sigmund Freud): This theory posits that people use rationalizations or justifications to reconcile their unethical actions with their self-concept. These rationalizations enable individuals to maintain their self-image as good and ethical people while still engaging in dishonest behavior. In the case of Afrina, she might justify their misconduct by believing that the amount in question is insignificant compared to the business’s income or that she is entitled to a “discount” due to her professional status.
- Social Comparison Theory (Leon Festinger): According to this theory, it’s a primitive drive in which individuals evaluate their own behavior by comparing it to others’ behavior. In a competitive environment where high-income professionals may observe others engaging in similar tactics, they may feel that their own misconduct is justified or even necessary to “keep up” with their peers. This can create a normalization of unethical behavior in Afrina’s mind, leading to a slippery slope where such misconduct becomes increasingly acceptable.
- Moral Disengagement Theory (Albert Bandura): This theory suggests that people may engage in unethical behavior by mentally separating themselves from the consequences of their actions. Through various cognitive mechanisms, such as moral justification, euphemistic labeling, and diffusion of responsibility, individuals can disconnect their actions from their moral standards, allowing them to behave unethically without feeling guilt or shame. For instance, highly educated professionals like Afrina would minimize the consequences of their actions by convincing themselves that the company they are evading payment from can easily absorb the loss.
It is essential to recognize these factors for the lawmakers, law enforcement agencies and judiciary to promote a culture of ethical behavior to counteract these tendencies.
The capitalist US economy is almost over 33.2 million small businesses, which account for 99.9 percent of all US businesses (SBA, 2022) which is driven by small businesses, and 33% of Small Businesses have been severely impacted By Credit Card Fraud by [https://www.forbes.com/advisor/business/software/payment-processing-users-safety/] from consumers like Afrina, who have become hurdles and are pain points for such businesses. The Small Business Administration (SBA) and the Financial Consumer Protection Bureau (FCPB) should take the initiative and should discourage financial consumers from engaging in such adventurism, as many people may not be aware of the possible consequences this may lead them into.
In conclusion, the case involving Afrina sheds light on the broader issue of friendly credit card chargeback fraud and its implications for businesses and immigrants seeking to build a life in the United States. It is essential for businesses to take proactive measures to prevent and address friendly fraud, while consumers must be aware of the potential legal consequences of engaging in such dishonest practices. As this case continues to develop, it serves as a reminder of the importance of upholding ethical behavior and American values, particularly for those seeking to secure their status through the several immigration Green Card Programs.
