What is Fraud Filter | chargebackhit.com

Fraud Filter


A fraud filter is a technological tool designed to scrutinize transaction data and identify common fraud indicators. These fraud-detection solutions are intended to alert users to potentially fraudulent transactions, enabling them to halt and reject untrustworthy ones.

Fraud remains an unfortunate reality in the realm of card-not-present transactions. As a merchant, your aim is to detect fraudulent activities as they occur rather than grappling with them in the aftermath of a successful attack, which can result in revenue losses, customer disputes, and chargebacks.

Fraud filters assist in filtering out suspicious transactions either before or during the checkout process. They achieve this by establishing rigorous verification criteria for each transaction and flagging transactions that do not meet them. A fraud filter can be any technology designed to analyze transaction data and identify commonly recognized signs of fraudulent activity.

Although fraud cannot be entirely eradicated, it is crucial to implement several fraud prevention solutions that work in unison to significantly lessen the possibility of being exposed to fraud.

Merchants must utilize a variety of methods and choose from a wide range of fraud filter options to prevent fraudulent transactions:

  • AVS/CVV: These checks compare cardholder data with transaction details. Mismatches in address or CVV can trigger a decline.
  • 3-D Secure: Acts like an online PIN, verifying cardholders and reducing fraud by up to 40%, with 95% of transactions approved. 3DS 2.0 integrates better with mobile devices.
  • Location Monitoring: Uses geolocation to verify customer location against provided shipping and billing data.
  • Velocity Checks: Flags potential fraud by monitoring transaction frequency, and alerting merchants to suspicious cardholder behavior.
  • Fraud Blacklists: Block orders from specific high-risk cardholders or regions with a history of fraud.