In the fight against credit and debit card fraud, merchants and issuers unwittingly create unintended casualties when they decline a legitimate cardholder’s transaction because of suspected fraud. No one wins when a “false positive” decline happens, and yet such denials occur with alarming frequency. In 2017, fraud-related false positives affected roughly 1 in 15 (6.7%) consumers, but the challenge of addressing this threat will only grow as fraudsters shift their tactics to target online and mobile retailers. Effectively combatting false positive declines requires a collaborative approach between merchants and issuers to share data that enables both parties to distinguish between fraudulent and legitimate cardholders.

Key questions discussed in this report:

• How prevalent are false positive declines in the US today?
• What groups of consumers are most at risk for false positive declines?
• How do false positives impact cardholder loyalty to issuers and merchants?
• How are fraud trends impacting issuer and merchant authorization strategies?