A fraud notification is automatically sent by an issuing bank when a certain transaction seems to be fraudulent (i.e. card details may have been used illegally or the bank has noticed some suspicious activity in the cardholder’s account). It is not a chargeback yet, but it may become one if certain measures are not applied. So, you should regard it as a sign that a certain customer may be involved in fraudulent activity. In this case, we recommend to contact the customer about the issue and follow these steps. If you are sure that the transaction was indeed fraudulent, refund the amount to prevent chargebacks.
In case a cardholder files a chargeback, you will receive a chargeback notification. It means that a customer contacted their issuing bank and disputed a certain transaction. There are various chargeback reasons. You do not need to issue a refund to your customer when you receive a chargeback notification. They automatically receive the disputed amount from the bank. Otherwise, you will return the money to your customer twice.
You have the right to dispute a chargeback if you think that the payment was valid. If you win the chargeback, you get the payment amount back. More information in our blog post: How to Prevent and Dispute Chargebacks?
Here you can find additional resources that may help you in the process and tell you more about payment processing.
If you haven't found answers to your questions here or need any further assistance, don't hesitate to contact us.