Credit card fraud is one of the main reasons the merchant suffers a financial loss.
The fraud alerts are initiated by the issuer. The issuer is submitting the fraud alert to the card brand, where the general report is formed and sent to the acquirer. For Visa, the report is called TC40 and for Mastercard - SAFE report. These are official fraud alerts that are monitored by card brands.
A bank fraud alert is the main identification of fraud activity. In most cases, it leads to chargeback and there are three main reasons it may occur:
- Merchant error - double charges, confusing billing logic, unclear descriptors, not available contact details.
- Criminal fraud - criminals gain access to credit card information and make unauthorized purchases.
- Friendly fraud - customers dispute the transaction claiming they didn't receive the order \ it was damaged \ they didn't make the transaction.
Fraud alert numbers are monitored by card brands and the breach of the fraud ratio thresholds may lead to fines and penalties. This is why it is vital for merchants to monitor the fraud ratio and our risk team doing our best to assist in keeping the ratio on an acceptable level.
To find out more about fraud and chargeback preventing measures please click here.
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