Eligible Fraud Alert Definition

1. Definitions

Capitalized terms not defined in the MSA or the SLA shall have the meaning set out below:

1.1 “Fraud Alert” means an early fraud claim provided to Merchant by its payment processor(s) or acquiring bank, but excluding chargebacks. 

1.2 “Fraud Alert Window” means, with respect to a given Transaction, the period commencing on the date on which Forter reviewed such Transaction and ending on the last date to submit a Fraud Alert with respect to such Transaction, as determined by the relevant credit card network. 

1.3 “Claim Notice” means, with respect to a given Transaction, the first indication of a fraud claim received by Merchant during the Fraud Alert Window from the relevant credit card issuer or payment processor or other third party vendor, whether such first indication is the notice of a chargeback request, dispute request, pre-chargeback notice, early fraud dispute request, TC40/SAFE, retrieval, or other related inquiry. The Claim Notice must include, at a minimum, the following information, as provided by Merchant’s payment processor:  payment processor name, Chargeback case number, orderID or other order identifier, claim amount, reason code, due date, and issue date, and Chargeback status.

1.4 “Eligible Fraud Alert” means, with respect to a given Transaction, a Chargeback  that meets the Fraud Alert Eligibility Criteria set forth in Section 2 of this Policy.

1.5 “Fraud Reason Code” means one of the reason codes listed in Section 3 of this Policy.

1.6 “Merchant Site” means Merchant’s website(s) and/or mobile application(s) for which the Forter Services are provided, as set forth in the applicable MSA.

1.7 “MSA” means the Merchant Services Agreement entered into between Forter and Merchant.

1.8 “Required Submission Method” means (A) for Transactions processed by a processor that has an available webhook and/or API (which, as of the date this Policy was last updated, includes Braintree, Adyen, Stripe, Checkout, PayPal and Shopify), the Merchant will make such processor webhook or API key available to Forter; (B) for Transactions processed by any other processor, Forter’s Claims  API. 

1.9 “Transaction” means a real time, live transaction made by an End Customer and reviewed and approved by the Forter Platform on a Merchant Site (or, in the case of a phone order, a transaction made by an End Customer and approved by the Forter Platform on a Merchant Site for which either (i) Forter receives the web-ID from Merchant as part of a telephone order submitted to Forter for review or (ii) Merchant is fully integrated with the Enhanced Authentication phone solution and provides Forter additional information for transactions when Forter requests it). For the avoidance of doubt, transactions manually submitted by Merchant and transactions originating from a source other than the Merchant Site where Forter is unable to collect the necessary Transaction Data (for example, transactions originating from marketplaces such eBay and Amazon) shall not be considered a “Transaction”.

1.10 “Transaction Data” means, collectively (i) the information required by the relevant Forter Decisioning API and (ii) the information collected from the Merchant Sites through Forter’s JavaScript and/or mobile SDK.

2. Fraud Alert Eligibility

2.1 A Fraud Alert related to a Transaction must meet the following criteria in order to be Eligible Fraud Alert (collectively, the “Fraud Alert Eligibility Criteria”). 

2.1.1 Merchant submitted the Claim Notice using the Required Submission Method within three (3) days of the Claim Notice being issued; 

2.1.2 the Transaction Data submitted to Forter at the time of Forter’s decision of the Transaction was accurate and complete (e.g., full JS/SDK data included, with the most recent versions of the JS/SDK installed on the relevant Merchant Site), and no changes are made to such data after Forter provided such decision; and

2.1.3 the Claim Notice identifies a Fraud Reason Code.

2.2 Notwithstanding anything to the contrary herein, the following will not be considered Eligible Fraud Alerts:

2.2.1 Fraud Alerts associated with Transactions that do not include all Transaction Data (e.g., Transactions where the Forter JavaScript or mobile SDK did not run, and Forter was unable to obtain necessary behavioral data).

2.2.2 Fraud Alerts associated with Transactions not approved by Forter but which Merchant elects to force-approve, or that are approved by Forter in accordance with a Merchant-defined policy, or where Merchant does not follow Forter’s recommendation (e.g., Forter recommends to send to 3DS but Merchant elects to approve without 3DS).

2.2.3 Fraud Alerts related to orders Merchant has not shipped (physically or digitally) to the relevant End Customer.

2.2.4 Fraud Alerts associated with Transactions approved for a Merchant (i) undergoing a Force Majeure Event, or (ii) that is judged bankrupt or insolvent, makes a general assignment for the benefit of its creditors, has a trustee or receiver appointed, or has a petition filed by or on behalf of such party under any bankruptcy or similar laws. “Force Majeure Event” means an event beyond the reasonable control of a party, including labor strikes, pandemics and extreme weather events affecting Merchant.

2.2.5 Any fraud alerts associated with Transactions where 3DS was not successfully executed.

3. Fraud Reason Codes

MasterCard:

1. 1. • Code #4837 and #37 – Fraud Transaction No Cardholder Authorization
   2. • Code #4863 and #63 – Cardholder Does Not Recognize Potential Fraud (in case of this reason code, Merchant must provide to Forter all documentation relating to all attempts made by the cardholder to contract Merchant and resolve the issue directly, together with all related correspondence and documentation.)

Visa:

1. 1. • Code #10.1 (Previously #62) – EMV Liability Shift Counterfeit Fraud (Card Not Present transactions only)
   2. • Code #10.4 (Previously #83) – Other Fraud – Card Absent Environment

American Express:

1. 1. • Code 4763/ FR2 – Fraudulent Transaction (under this reason code, Merchants who are members of the Amex Chargeback Full Recourse Program must disclose this fact to Forter prior to the commencement of the Forter Service)
   2. • Code 4540/ F29 – Fraud – Card Not Present
   3. • Code 4534/ F24 – Fraud – No Card Member Authorization

Discover:

1. 1. • Code UA02 – Declined Authorization
   2. • Code 7030 – Fraud card not present transaction
   3. • DINERS – C42: Fraud card not present transaction

JCB:

1. 1. • Code 546 – Unauthorized purchase

PayPal:

1. 1. • Unauthorized Transaction – the customer did not authorize purchase of the merchandise or service

ELO:

1. 1. • Code 83 – Card Absent FRAUD