Definition
Fraud notifications, or fraud advice, are transactions that cardholders have reported to issuers as fraudulent. Acquirers receive these transactions via the card schemes in the TC40 and SAFE reports. These transactions may or may not result in a subsequent dispute, however they provide important insights and merchants should keep an eye on these notifications.
How can the merchant use fraud notification data?
While these notifications do not directly prevent chargebacks or fraudulent transactions, merchants can use the data for the following:
to identify potential fraud patterns
to enhance their monitoring and fraud prevention tools
to decide to refund such transactions to prevent potential disputes
Visa uses the data of the fraud reports calculating fraud to sales ratios. Exceeding the set thresholds for fraud to sales ratio, in combination with other factors, can lead to merchants being included in compliance programs and may result in non-compliance assessments. Issuers may also use the fraud reports to determine the risk of fraud and chargebacks a merchant poses