Dispute classification is the process of determining the correct dispute type based on the transaction, customer claim, and available evidence.

It defines the applicable rules, timelines, and resolution path. Incorrect classification leads to invalid claims, missed recovery opportunities, and non-defensible outcomes.

Fraud involves unauthorized transactions, while disputes include cases where transactions were authorized but contested.

Understanding this distinction is critical because each follows different regulatory and operational handling.

A defensible decision clearly explains why the outcome was reached, supported by transaction data, customer statements, and applicable rules.

It must withstand audit, regulatory review, and potential escalation.