Pandemic drives 68 percent increase in month over month dispute-related request and uptick in chargebacks
April 18, 2021 – Austin, TX - Restaurant Marketing and Delivery Association (RMDA) announced today the selection of TrueAccord as the organization’s digital debt collection agency. The RMDA represents 700+ independent local restaurant delivery companies, which are a part of the $40 billion takeout and delivery industry, and has seen a staggering jump in dispute-related request. According to figures from MyChargeBack, a fund recovery firm, there was a 68 percent increase in month over month dispute-related requests between February and April 2020 for low dollar (less than $5,000) transactions, which is most likely attributed to the pandemic.
All of the RMDA members have access to TrueAccord’s collection tools for a minimal recovery rate. In turn, this also helps the restaurant partners be paid for every meal ordered.
“The restaurant delivery industry, especially local independent services, is more vulnerable because they are less equipped to recoup losses. Many restaurants and delivery services may not even realize for some time they are a victim disputes because the chargeback amount for a food order is typically low, in the $30 to $80 range,” stated Andrew Simmons, President of RMDA. “It’s like shoplifting, but as a digital dine-and-dash. The buyer gets a meal and skips out on the bill by filing a chargeback. Fraudsters perpetrate this scheme because it’s easy with no apparent recourse.”
Chargebacks are a kind of forced payment reversal facilitated by a cardholder’s issuing bank. The customer goes to the issuing bank, claims a transaction was fraudulent or had some other issue, and the bank overturns the sale on the cardholder’s behalf. Disputes typically originate from a legitimate purchase, and then later the person files a chargeback without a valid reason. A few examples include that the food order wasn’t delivered, food wasn’t as described or the original transaction wasn’t authorized by the cardholder.
TrueAccord has years' worth of data on the behavior of some 12 million American debtors. Based on this research, it shows many consumers are chronically overcommitted and strapped for time, and therefore, they are willing to pay for convenience. In general, all categories of merchant have dealt with more friendly fraud and chargebacks.
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Founded in 2013, TrueAccord’s data-driven debt collection platform is disrupting the collections industry by helping businesses collect more debt online than traditional methods. TrueAccord’s platform is powered by machine learning with a decision engine that analyzes consumer behavior and delivers personalized and empathetic consumer experiences. By communicating at the right time in the right channel with payment options that meet consumer needs, TrueAccord provides exceptional recovery rates for top 10 financial institutions, debt buyers, lenders, and technology companies. TrueAccord empowers many of the estimated 77 million consumers who are in debt every year to get on a path to better financial health. To learn more, go to http://www.trueaccord.com.