What is Fraud Activity?

Fraud activity refers to transactions that involve unauthorized use of a payment method, such as a credit or debit card, typically committed with the intention to deceive or commit theft. This definition encompasses situations where an individual uses another person's card without permission, thereby leading to financial losses for the affected party and the financial institutions involved. Understanding fraud activity is crucial for businesses and payment professionals, as it directly impacts their security measures, customer trust, and financial viability.

The other options do not align with the concept of fraud activity. A legitimate customer complaint or a product dispute pertains to legitimate issues that arise during the normal course of business, while a marketing analysis of customer behavior focuses on understanding customer preferences and trends rather than examining fraudulent actions. Therefore, the definition of fraud activity is centered specifically on unauthorized transactions, making it essential for maintaining secure payment processes.