Who are considered fraudulent merchants?

Fraudulent merchants are defined as those who knowingly and intentionally engage in schemes to deceive customers or financial institutions for illegal gain. This includes activities such as identity theft, selling counterfeit goods, or manipulating transaction data to obtain funds under false pretenses. The key aspect of such merchants is their intent to commit fraud, which distinguishes them from those who may simply have a high transaction volume or return rate without malicious intent.

In contrast, merchants with high customer satisfaction ratings, those working with financial institutions exclusively, and those offering loyalty programs do not necessarily have any fraudulent intent or activity associated with them. These attributes are often indicative of legitimate business practices rather than fraudulent behavior. Therefore, the correct identification of fraudulent merchants is rooted in their intentional engagement in deceptive practices, making the distinction clear and important in the realm of electronic transactions and financial services.