False Positive

What is False Positive?

A false positive in fraud detection occurs when a legitimate transaction is incorrectly flagged as fraudulent and blocked by a security system. This often happens when a customer’s normal buying behavior is mistaken for suspicious activity due to overly strict risk rules.

Why It Matters

• It results in lost revenue and can drive frustrated customers to shop with a competitor instead.

• High false positive rates increase the workload for manual review teams who must investigate legitimate orders.

• It can damage a brand’s reputation if loyal customers are repeatedly blocked from making purchases.