Card Fraud Monitoring

Introduction

This guide is focused on the lifecycle and customer experience of Visa and Unit’s fraud monitoring services for any transactions made using a card. This includes transactions made using mobile wallets, virtual, and physical cards.

Transaction Lifecycle

Any card related activity (purchase, ATM withdrawal etc.) gets evaluated for fraud by Visa. Visa uses proprietary machine learning models that are personalized to your specific customer base and the specific end customer card use patterns. This model gets better over time, and ideally as your company matures, the number of false fraud detections decreases.

It is not easily explainable why certain activity is assigned with a specific risk score since there is a very large number of data points that impact that score - for example, the same activity may be scored very differently if it happens on 3 PM vs. on 3 AM.

After the activity gets processed by Visa, Unit performs a number of checks against the cardholder account: card status, limits and balance checks. If you are participating in the authorization flow, this will happen after you have approved the authorization request.

3-D Secure

For online purchases, cardholder authentication is sometimes performed via 3-D secure protocol before the authorization process begins - if you, the merchant and their payments provider choose to enroll with this program. The goal of 3-D Secure is to verify a customer’s identity. In most cases, this process is transparent from the end-customer perspective. Occasionally, this mechanism will trigger a One Time Password authentication.

If the merchant successfully authenticates the end customer using 3-D secure, they are guaranteed “zero-liability” - which means the issuer will be held liable for any fraud related disputes.

Visa Transaction Scoring

Visa assigns fraud scores to each activity. Depending on the category that the score falls into, Visa will take different actions:

1. Low fraud risk: Visa does not intervene in the activity
2. Mild fraud risk: A fraud case is created, but the suspicious activity is processed. Visa will try to contact the End-Customer to confirm that the activity was not fraudulent.
3. High fraud risk: When Visa’s fraud risk scoring reflects high fraud risk, a fraud case is created, the suspicious attempt will be automatically declined, and Visa will try to contact the customer to confirm if the transaction was fraudulent or legitimate.
4. Severe fraud risk: When Visa’s fraud risk scoring reflects high fraud risk, a fraud case is created, the suspicious attempt will be automatically declined, and the card status is changed to Suspected Fraud, which means the card is blocked. Visa will then try to contact the customer to confirm if the transaction was fraudulent or legitimate.

Notes

• Unit recommends clients to listen to the card.statusChanged webhook event, when “newStatus": "SuspectedFraud". You can then actively notify your customer that the card status changed, and that they should expect communication attempts from Visa to validate recent activity.
• If a previous fraud case was created in the past seven days, a card may be declined without new communication attempts coming from Visa.

Visa Communication Methods

Visa reaches out to customer to confirm transactions in one or more of the following ways:

1. Visa sends an email to the customer with recent transactions from the email address noreply@cardfraudalerts.com. The customer can either confirm or deny the activity detailed in this email.
2. Visa sends a text message to the customer to confirm recent transactions. The customer can either confirm or deny the activity by responding to the text message.
3. If the customer hasn’t responded to previous communication, Visa calls the customer and asks them to verbally confirm if the suspicious activity is legitimate or fraudulent.
4. If the customer does not respond to email, text or initial phone call, Visa will continue to call the customer for 1 business day.

Outbound calls are made between 8:00 AM and 9:00 PM local cardholder time, and voicemails are left on the phone numbers that are on file.

End-Customer responses and results

There are three different actions that a customer can take once Visa reaches out about suspected fraud.

1. Action: Customer confirms that all transactions are legitimate within one day.
   1. Result: If the transaction was declined due to a high fraud risk, Visa will apply temporary partial fraud monitoring override for 24 hours. If the card was blocked, Visa will unblock the card.
2. Action: Customer confirms that some transactions are fraudulent within one day.
   1. Result: The card will remain in SuspectedFraud status, the customer will work with Visa to dispute transactions, and Visa will direct them to your support team to issue a new card.
3. Action: Customer does not respond to Visa’s communication attempts within one day.
   1. Result: Visa can no longer unblock the card. In this case, if the customer reaches out to you:
      1. If the customer confirms that the card was compromised: please issue a new card for the customer and if needed, refer them to Visa to dispute transactions.
      2. If the customer confirms that the card wasn’t compromised, please contact Unit Support to review the case and determine if the card can be unblocked, or a new card should be issued.