Goodwill Abuse: How Customer Fraud Can Cost You Big

woman with fist in the air celebrating accomplishing customer goodwill fraud

[Estimated read time: 4 minutes]

Everyone knows the old saying: “The customer is always right.” The saying insists customers are always right — not that they are always honest. It’s likely that the majority of customers who contact you for help are doing so in good faith. And your agents are trained to make customer satisfaction a priority, so they will do their best to resolve the customer’s issue and make them happy. But time and time again, companies fall victim to fraudsters who abuse the trust of your customer service agents and exploit the gaps in your CRM technology for their own gain. 

The cost of goodwill abuse

When a customer makes a false complaint in order to receive goodwill from the company, usually in the form of free items, coupons, or discounts, it is called “goodwill abuse.” Data from Gartner shows that about 70% of call center fraud is perpetrated by the same people, sometimes referred to as repeaters. These two phenomena often occur together, because once a goodwill abuser figures out how easy it is to get something for nothing from your company, they will do this as frequently as they can get away with it. And without a smart CRM to put two and two together, many companies are never the wiser. 

For example, let’s say you are a popular online apparel brand, and a customer calls about receiving the blouse she ordered with a big rip in it. The call center agent issues a $20 off coupon. The next week, the same customer calls to complain about her replacement blouse arriving several days after the specified delivery date. A different agent sends her a $15 gift card. A few days later, she calls yet again to complain about the fit of the garment, and a different agent sends her some free merchandise. If these three interactions are treated as separate, unconnected incidents, your company will never catch on to this customer’s pattern. And when she tells all her friends about how simple it is to get free stuff from your call center, it won’t be long until you’re getting more calls like hers.

Take the number of calls you receive from customers in a year, and assume 1% of those calls are fraudulent. Multiply that by the average amount of compensation given to complaining customers, and you likely have a large amount of money going out the door each year at the hands of dishonest callers.

The multi-channel challenge

Gartner estimates that up to 30% of fraud happens across multiple channels. It’s not surprising, given the ever-growing range of channels customers use to contact your company. Without a united, 360-degree view of customers across channels, it would be impossible to identify fraudulent behavior taking place. But with an omni-channel approach to customer data, smart CRM systems can equip brands to protect themselves from customers and non-customers alike who are up to no good.

Case study: catching fraudsters in the act

The contact center for a well-known lawn care brand recently experienced a rash of fraudulent customer calls. Several people called requesting refunds because of an issue with one of their top lawn products. Most call centers would have provided the refunds without questioning, never suspecting anything sinister. However, Astute’s CRM has repeater alert functionality that picked up on a strange pattern: all these calls were coming from the same location. If that wasn’t suspicious enough, the location was an apartment building — none of these so-called “customers” even had lawns! It was discovered that several neighbors in the same building were all in on the scheme together, and had they succeeded, would have drained the company of a large sum of money, one refund at a time.

Astute’s CRM uses goodwill threshold limits, address linking, cleaning and verification to automatically and immediately alert you to potential fraudulent activity. The system also tracks how much goodwill has been distributed and the impact it has on customers. With the right technology, you can prevent goodwill abuse and customer fraud from hurting your brand and your bottom line.