In the context of identity verification, a false positive refers to an individual passing the identity check even though they’re not who they say they are. In other words, letting a bad actor through.
In the context of fraud prevention, a false positive refers to incorrectly flagging a good account or transaction as fraudulent. In other words, blocking a legitimate user or transaction.
A false positive occurs when customers or transactions that pose a potential risk are improperly classified as safe. This can enable the bad actor to wreak havoc, erode trust in your business, and also result in regulatory and legal challenges.
A false positive happens when you block a legitimate user or transaction. False positives in fraud prevention can reduce revenue, hinder growth, and decrease customer satisfaction.