Which organization monitors chargebacks to decrease fraudulent activity?

MasterCard and Visa have established themselves as the leading organizations in the payments industry that actively monitor chargebacks to mitigate fraudulent activity. Both companies have implemented sophisticated systems and protocols to track chargebacks, analyze patterns, and identify potentially fraudulent transactions.

Their reason for monitoring chargebacks stems from the critical need to maintain the integrity of their payment networks, protect merchants from losses due to fraud, and ensure consumer confidence in using their cards for transactions. By closely analyzing chargeback data, MasterCard and Visa can create insights into emerging fraud trends, adjust their risk management strategies, and refine their rules to help prevent future occurrences. This proactive approach not only benefits their network participants—merchants and cardholders—but also enhances the overall security of electronic payments.

Other organizations mentioned in the options have distinct roles, with the Federal Reserve Bank overseeing monetary policy but not directly involved in chargeback monitoring, while the Department of Justice focuses on legal enforcement related to fraud. The Better Business Bureau primarily addresses consumer complaints and promotes marketplace trust, but it does not have a direct role in managing or monitoring chargebacks. Thus, MasterCard and Visa's dedicated efforts in this area make them the correct choice for monitoring chargebacks to combat fraud.