Fraud prevention is now one of the biggest sources of friction between a business and its best customers — and most companies never see the bill. Someone travels abroad without notifying their bank, the credit card flags a suspicious charge, and account access locks. Now they’re furiously digging through their bag for spare cash while playing trivia games over the phone and typing in secret codes just to reach their own money. This is the all-too-common story of how fraud prevention systems treat loyal customers like criminals when they’ve done nothing wrong, the real price they pay, and what it’s costing your business.
By Helen Garneau
Somewhere, right now a person trying to make a purchase just found out their card has been declined. They’re simply trying to access their own money to make a purchase but are now holding up the line, getting eyerolls from an impatient store clerk, calling a 1-800 number to confirm that, yes, they are in fact themselves, and probably cursing the name of the bank or financial institution that is putting them through this.
It sounds like a miserable situation, but the fraud system did its job. It stopped suspicious activity. It just stopped the wrong person.
For decades, the industry has viewed the impact of fraud through a single lens: financial loss. Analysts track the dollars stolen, volume of chargebacks, and rising loss rates. While these metrics are vital, they ignore the hidden costs that fraud has on the customer and ultimately, to your bottom line.
When the fraud prevention tax hits good customers
While yes, it is important to track financial losses, its also important to acknowledge the effects your prevention systems have on loyal customers and understand the downstream financial impact to your business.
Their time. Sending a routine payment can now mean sitting on hold, waiting for callbacks, one-time codes, and the occasional security trivia question about a street the customer lived on in 2009. What should take a couple of minutes at most can now occupy half of their day.
Cart abandonment. When payment processes involve too many hoops just to make a purchase, customers simply give up. This leads to lost transactions and forfeited revenue.
Fraud center support. Each false positive triggers a phone call, potentially requiring a human response. Even with AI’s help, many call centers are simply cost centers masquerading as protection.
Customer experience. When customers discover that managing their own account is such a burden, that realization lingers and they’ll inevitably gravitate toward whichever company prioritizes a seamless experience.
Add it all up and the fraud tax rivals the actual fraud losses. In 2025, the global cost of digital fraud hit $534 billion, yet organizations are concurrently suffering abandonment rates of 60-70%. Businesses are burning millions in acquisition spend only to drive their own customers away, effectively paying a premium to lose the revenue they are trying to protect in the first place.
Why your system treats good customers like threats
Back to that customer stuck on hold at the checkout counter. With their card declined and the line behind them growing, they are likely becoming more and more frustrated as each moment they sit on hold customer support passes just to prove they have the right to spend their own money.
Most fraud prevention strategies—whether driven by AI or teams of human security specialists— are preoccupied with flagging suspicious patterns but they miss key purpose of Identity Verification (IDV): identifying people.
Device fingerprints, velocity rules, usernames and passwords, behavioral scoring, all of it is merely trying to infer identity from circumstantial evidence. When proof is unclear or easily stolen and faked—as is frequently the case—systems default to a complete shutdown as the safest protocol. A decade-long customer and a fraudulent card thief receive identical treatment because the system lacks the tools to distinguish between the two.
This creates an identity verification gap—one that is now solvable.
The Indicio Solution
Indicio Proven solves this gap by making digital identity truly provable. Instead of intrusive questions standing between the customer and your service, it uses Verifiable Credentials to provide secure, reusable digital IDs that stop fraud while keeping the user experience seamless.
Rather than making customers deal with clunky authorization requirements when a transaction is flagged, they can now instantly verify themselves by tapping their digital wallet and sharing their digital ID. This information is authenticated in under a second for total accuracy. And because their biometrics are linked to the credential, fraudsters can’t access the credential and are immediately blocked.
Built on open standards, alignment with global identity regulations (including eidas and EUDI), built with multiple credential types (like mDOC/MDL) , comes with a variety of biometric and document check providers for authenticated biometrics, offers self-hosting options, and easy-to-integrate SDKs, Indicio Proven is the leading way to update any IDV system to advanced, portable, trustworthy identity.
The point
Fraud prevention was supposed to protect customers but somewhere along the way, it started treating them as the threat and billing them for the privilege.
The way out is simple: give people a way to prove who they are, and stop making everyone else pay for the ones who can’t.
Your customers just want to make a purchase. Let them.
Stop billing your best customers for fraud they didn’t commit.
Indicio Proven lets customers verify themselves instantly bypassing deepfakes and synthetic identities. Contact us for a demo.