# Fraud challenges Learn about fraud challenges, an additional layer of verification for authorizations. Turn on fraud challenges to: - Minimize accidental blocks on transactions that appear fraudulent, but are in fact legitimate - Conduct additional verification on authorizations Stripe deems high risk - Conduct additional verification on authorizations you determine require it Fraud challenges allow your cardholders to retry non-fraudulent transactions that would otherwise be blocked by fraud controls. When fraud challenges are enabled and a transaction is declined for fraud, Stripe sends the cardholder an SMS message. They can verify whether the transaction was fraudulent by replying to the message. All cardholders with an associated phone number can use fraud challenges. ## Before you begin - Make sure you’re collecting [phone numbers](https://docs.stripe.com/api/issuing/cardholders/object.md#issuing_cardholder_object-phone_number) for your cardholders - Enable fraud challenges in your [card issuing settings](https://dashboard.stripe.com/settings/issuing/authorizations) ## High-risk transactions Stripe blocks transactions above a certain risk level. The risk level of a transaction is determined by the network you’re using. High-risk authorizations are identified by a value of `suspected_fraud` in the [request_history.reason](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-request_history-reason) field, and won’t trigger [`issuing.authorization_request` webhooks](https://docs.stripe.com/issuing/controls/real-time-authorizations.md) when declined. ## Fraud challenge flow Stripe starts sending fraud challenges on high-risk authorizations as soon as you enable the feature in your [card issuing settings](https://dashboard.stripe.com/settings/issuing/authorizations). You can see fraud challenge activity with the [Authorizations API](https://docs.stripe.com/api/issuing/authorizations.md). Declined authorizations that were fraud-challenged have a value in the [fraud_challenges](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-fraud_challenges) field. Subsequent authorizations that the cardholder verifies as genuine have a value of `true` in the [verified_by_fraud_challenge](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-verified_by_fraud_challenge) field. The following shows an example of a fraud-challenged and declined authorization: ```json { "id": "iauth_1CmMk2IyNTgGDVfzFKlCm0gU", "object": "issuing_authorization", "approved": false, ..."fraud_challenges": [{ "channel": "sms", "status": "pending" }] } ``` This example shows a subsequent authorization that has been verified by the cardholder: ```json { "id": "iauth_1CmMk28Jx923VfJJwMCejmX", "object": "issuing_authorization", "approved": true, ..."verified_by_fraud_challenge": true } ``` > Verified, genuine authorizations trigger `issuing_authorization.request` webhooks. If you use [real-time authorization](https://docs.stripe.com/issuing/controls/real-time-authorizations.md), consider `verified_by_fraud_challenge` when deciding whether to approve an authorization. If your cardholder has explicitly confirmed a transaction as genuine, we recommend that you don’t apply any of your own risk controls. To use fraud challenges, make sure that: - The phone number associated with your cardholder is valid and correct - Existing transaction decline logic in any `issuing_authorization.request` webhook handler doesn’t conflict with fraud challenges ### Cardholder flow Your cardholders might receive a challenge and contact your company’s customer service to learn more. Make sure your internal teams are prepared to answer questions that they might receive from your customers about these challenges. When a cardholder receives a fraud challenge, they can override the declined transaction by verifying that the suspicious transaction is legitimate and initiated by them. Fraud challenges are only available to cardholders with an associated [phone number](https://docs.stripe.com/api/issuing/cardholders/object.md#issuing_cardholder_object-phone_number). The cardholder verifies the override with a one-time SMS prompt with the following language: > Did you attempt a *[amount]* transaction at *[merchant]*? Reply YES if you did, or NO if not. Reply STOP to opt out If the cardholder replies “YES,” they receive the following: > Thanks, please wait a moment and try again. To complete the purchase, the cardholder needs to initiate the transaction a second time. After retrying, they won’t receive the SMS prompt, and Stripe won’t block the transaction for being high-risk. If the cardholder instead replies “NO," they receive the following: > This transaction was declined. We recommend you cancel your card and request a new one. Review your account for other suspicious transactions. If the cardholder replies “NO”, Stripe automatically submits a fraud report to the network. Cardholders can reply “STOP” to opt out of fraud challenges, and “START” to opt back in again. The following diagram shows the above flow. This sequence diagram is a test. (See full diagram at https://docs.stripe.com/issuing/controls/fraud-challenges) ## Fraud challenges for Connect platforms If you use [Connect](https://docs.stripe.com/issuing/connect.md) with Stripe Issuing, turning on fraud challenges enables it for all cardholders across all connected accounts. ## Availability Fraud challenges are only available to cardholders with phone numbers in the following countries. Attempts to send fraud challenges to other phone numbers, or to cardholders who are physically outside of these countries, won’t be delivered. - GB - US Fraud challenges that can’t be delivered because of an unsupported country code have a [status](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-fraud_challenges-status) of `undeliverable`. ## Testing Stripe doesn’t send fraud challenge text messages to test cardholders. To help you integrate with fraud challenges, we provide helper APIs for simulating a fraud challenge flow, including sending and responding to a challenge. ## Challenge a high-risk test authorization Use helper APIs to [create a test authorization](https://docs.stripe.com/api/issuing/authorizations/test_mode_create.md). The risk level of the authorization you create is controllable: you can create a high-risk authorization by overriding the default risk assessment with a high fraud risk level. ```curl curl https://api.stripe.com/v1/test_helpers/issuing/authorizations \ -u "<>:" \ -d amount=2300 \ -d card="{{ISSUINGCARD_ID}}" \ -d "risk_assessment[fraud_risk][risk_level]"=high \ -d "risk_assessment[fraud_risk][fraud_score]"=95 ``` This authorization would be declined, with a `reason` of `suspected_fraud` in its [request_history](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-request_history). If fraud challenges are turned on, then a fraud challenge is created for this high-risk test authorization. See [Before you begin](https://docs.stripe.com/issuing/controls/fraud-challenges.md#prerequisites) for the steps required to turn on fraud challenges. Alternatively, you can test fraud challenges by issuing a challenge yourself. To induce a test fraud challenge, create a test authorization without a risk assessment override, and then respond to an `issuing_authorization.request` webhook. This method doesn’t require fraud challenges to be turned on in your Issuing settings. Learn how to [trigger fraud challenges yourself](https://docs.stripe.com/issuing/controls/fraud-challenges.md#define-your-own-logic) in webhook responses. ## Simulate a response to the fraud challenge After inducing a test fraud challenge, you can simulate a cardholder’s response using another helper API. Call the [test fraud challenge response](https://docs.stripe.com/api/issuing/authorization/respond.md) method, passing the ID of the authorization you created in step 1, and a `confirmed` parameter. Provide `confirmed=true` to simulate the cardholder responding “yes, I made this transaction, and it isn’t fraudulent.” Provide `confirmed=false` to simulate a response of “no, I didn’t make this transaction, it’s fraudulent.” ```curl curl https://api.stripe.com/v1/test_helpers/issuing/authorizations/{{ISSUINGAUTHORIZATION_ID}}/fraud_challenges/respond \ -u "<>:" \ -d confirmed=true ``` A fraud report isn’t submitted to the network in test mode when you set `confirmed=false`. ## Try the high-risk authorization again If you simulated a response of “yes, I made this transaction” (`confirmed=true`), you can try the high-risk test authorization again. This time, the authorization won’t be declined because you simulated a scenario where the cardholder has indicated that the original, declined transaction is actually legitimate. ```curl curl https://api.stripe.com/v1/test_helpers/issuing/authorizations \ -u "<>:" \ -d amount=2300 \ -d card="{{ISSUINGCARD_ID}}" \ -d "risk_assessment[fraud_risk][risk_level]"=high \ -d "risk_assessment[fraud_risk][fraud_score]"=95 ``` This new authorization won’t be declined for `suspected_fraud`, and is approved. It might also be declined for other reasons (such as an insufficient test balance), look at the authorization’s [request_history](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-request_history) to learn more. Additionally, this new authorization’s [verified_by_fraud_challenge](https://docs.stripe.com/api/issuing/authorizations/object.md#issuing_authorization_object-verified_by_fraud_challenge) field will be `true`. This indicates that the cardholder has previously completed a fraud challenge for a similar authorization (as simulated in step 2).