This report takes a closer look at the threat of friendly fraud, by first explaining the spectrum of friendly fraud and exploring whether merchants and issuers are in fact “training” cardholders to initiate disputes. It also examines the balancing act that merchants and issuers must navigate while trying to reduce friendly fraud, while also preserving important customer relationships. Lastly, it details how two companies are addressing the problem, and then outlines six best practices for controlling the damage.