This rule tracks confirmed fraud as a percentage of total merchant transactions, identifying businesses with elevated fraud exposure.

System flags when:
1. Confirmed fraud transactions exceed 0.5% of total volume
2. Measured over rolling analysis period
3. Fraud rate indicates security or business model issues

>0.5% fraud rate is significant because:
- Industry average is typically 0.1-0.3%
- Indicates merchant vulnerability or fraud targeting
- May signal security control weaknesses
- Could indicate fraudulent merchant business model
- Represents preventable financial losses

High fraud rates can result from:
- Inadequate fraud prevention tools/processes
- High-risk product/service offerings
- Compromised payment systems or terminals
- Merchant collusion with fraud rings
- Ineffective customer verification procedures
- Target of organized fraud operations

Alert enables risk management to:
- Fraud prevention consultation and tool implementation
- Security assessment of merchant systems
- Business model risk evaluation
- Enhanced transaction screening activation
- Merchant education on fraud indicators
- Account review for potential enhanced monitoring or termination

Addressing fraud rate requires:
- Multi-factor authentication implementation
- Enhanced verification procedures
- Fraud detection tool deployment
- Employee training on fraud recognition
- Regular security audits and updates