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Early fraud warnings

Introduction to Early Fraud Warnings

ShopWired's Early Fraud Warnings system is designed to protect merchants from potential disputes and chargebacks by alerting them to transactions that are at high risk of being subject to a dispute. This preemptive measure allows for proactive management of transactions that may otherwise result in financial losses and penalties.

These warnings are triggered by reports from financial institutions, such as Visa's C40 reports and Mastercard's SAFE system. When we receive notification a transaction on your ShopWired store has been indicated through one of these systems as being potentially fraudulent, you'll receive an email alert, allowing you to review and take necessary actions promptly.

Steps to Take After Receiving a Warning

When you receive an early fraud warning, we recommend taking immediate action. Here's a step-by-step guide on how to proceed:

  1. Contact the Customer: Reach out to the customer involved in the transaction to verify its legitimacy. This can help clarify any misunderstandings or confirm suspicions of fraud.
  2. Review Transaction Details: Examine the transaction's specifics, including payment method, purchase history, and any communication with the customer. Look for red flags that might indicate fraudulent activity.
  3. Consider Issuing a Refund: If you cannot verify the transaction's legitimacy or wish to avoid a potential dispute, issuing a refund might be the best course of action. This can help avoid chargeback fees and the hassle of a dispute resolution process.
  4. Report Your Findings: Inform your payment processor or bank about the situation, especially if you suspect fraud. They can offer further guidance and assistance.

FAQs on Early Fraud Warnings

What triggers an early fraud warning?
Warnings are triggered by transactions that are identified by card issuers as being potentially fraudulent.
How soon after a warning will a dispute arise?
While the timing can vary, warnings usually precede disputes by a short period, giving merchants a short window to act preemptively.
Is every warning a guarantee of a dispute?
No, not all warnings result in disputes. However, they indicate a higher risk, and taking them seriously is advisable.
Can I prevent disputes with early fraud warnings?
By taking proactive measures in response to warnings (e.g. refunding the transaction), you can act before a dispute is initiated and avoid a dispute fee.