Types of Fraud

Fraud in card not present payments falls into a few clear buckets. Knowing which type you face helps you choose the right prevention steps and the right response when a dispute arrives.

Main types

True fraud Someone other than the cardholder used the card or account. This includes stolen cards, account takeover, and synthetic identities. Common signs are failed or mismatched AVS and CVV, unusual device or IP, shipping far from billing, and rapid repeat attempts. Prevention focuses on stronger checks and step up when risk is high.

First party misuse Also called friendly fraud. The cardholder made the purchase but later disputes it. Reasons include unrecognized descriptors, not received claims when tracking shows delivered, or canceled subscriptions that were not actually canceled. Signs include a good AVS and CVV match, normal device history, prior successful orders, and usage logs that show access. Prevention is about clarity and simple support.

Merchant error Not fraud, but a common dispute source. Examples are duplicate billing, wrong amount, late or missing shipments, or unclear policies. Fix process issues in billing, fulfillment, and support. When an error occurs, refund quickly to avoid a chargeback.

Map reason codes to types

Reason codes point to the likely type. Fraud codes usually map to true fraud. Not recognized and not received can be first party misuse or an operations issue. Use the code to guide your evidence. Networks differ, so keep a simple reference by network.

Data you should keep

Keep order details, device and IP, AVS and CVV results, 3DS status, delivery or access logs, customer communications, and the exact policy text shown at checkout. These records let you prevent more issues and win valid disputes.