Visa Claims Resolution manual

Transcription

1 Visa Claims Resolution manual Date: 2/15/18 Simon Carmiggeltstraat DJ Amsterdam The Netherlands Page Adyen BV

2 Introduction VCR The main changes Different workflows Allocation Chargeback threshold Collaboration New VCR reason codes Request for Information (RFI)... 5 Allocation Pre-arbitration and Arbitration Arbitration Compelling evidence Allocation workflow Compelling evidence fraudulent disputes... 6 Collaboration Compelling evidence Collaboration workflow Compelling evidence Consumer Disputes Compelling evidence processing errors Page Adyen BV

3 Introduction This document is intended as a guideline for merchants in understanding Visa Claims Resolution (VCR). 1.1 VCR Visa has announced a new global dispute resolution process, called VCR. This new process is introduced in order to improve the efficiency of handling chargebacks. It is designed to have chargebacks resolved faster and easier with system edits that will prevent invalid disputes from entering the system. VCR will go live in Hong Kong and New Zealand end of October Incoming domestic disputes in these countries and disputes between the two countries will use the VCR dispute process. Remaining countries will migrate as of April All incoming disputes after this date will be processed with VCR. 1.2 The main changes The existing 22 chargeback reason codes will be replaced by new reason codes and grouped into 4 categories: Fraud Authorization Processing Error Consumer Disputes Different workflows Disputes will be routed in two different workflows, called Allocation and Collaboration. Fraud Authorization Allocation Processing Error Consumer Disputes Collaboration Allocation Fraud and Authorization related chargebacks will be processed through an automated workflow. For disputes in this category, Visa will perform (automated) checks and reject invalid disputes. For example, disputes on refunded transactions and chargebacks submitted after the required timeframes. If the chargeback is valid, Visa will automatically assign liability to the merchant and defending the dispute will be allowed if the merchant can provide compelling evidence that meets the criteria as defined in Table 3 Compelling Evidence Fraud (page 10). For disputes in the Allocation workflow, Adyen will book the chargeback, debit the merchant account and for disputes in New Zealand and Hong Kong no option will be available to upload documents in the Adyen Customer Area (CA). Adyen is implementing the document upload feature and it will be enabled with the release date for remaining countries, which is April For disputes in Hong Kong and New Zealand, Adyen requires merchants to the defense material for VCR disputes to our Risk Team on apacrisk@adyen.com within 18 days of the chargeback date. The team will investigate the case and advice whether to proceed with Pre-Arbitration. Please be informed that if the requirements of compelling evidence are not met, the documents will be rejected after review and further action will only be taken if the merchant can provide the required information. If the documents are valid, the Risk Team will initiate a Pre-Arbitration request and forward the case to cardholder s bank. The bank has 30 days to respond by either accepting or declining the case. If they accept the case, the merchant account is credited the chargeback amount (chargeback reversed) and the dispute cycle has ended. Page Adyen BV

4 If the Pre-Arbitration is declined, merchant will be notified accordingly in the Adyen Customer Area and the dispute can be considered lost. If the merchant does not agree with this outcome, they can reach out to their local Risk Team to discuss the case. Merchant should familiarize themselves with the VCR dispute criteria and update defense material to meet the mentioned requirements. For detailed explanation of the Allocation workflow, please review the Allocation chapter on page Chargeback threshold Visa will only allow maximum 35 fraudulent chargebacks on the same card, exercised within a timeframe of 120 days for Card Not Present (E-Commerce) transactions Removed chargeback rights for CVV2 mismatch transactions As of 14 April 2018, Visa will block chargebacks with a fraudulent reason code (VCR reason code 10.4) for card-absent (e-commerce) transactions if the issuing bank approved the transaction with a Card Verification Value 2 (CVV2) mismatch. Visa encourages merchants to use CVV2 as part of their layered approach to fraud prevention. 1.3 Collaboration Processing Errors and Consumer Disputes will be forwarded to this workflow, where the dispute defense process will remain the same as it is today. The only difference is the representment timeframe and the reason code change. Currently, the merchant has 45 days to defend chargebacks. For Collaboration disputes, Visa has reduced the representment timeframe to 30 days. Please be informed that the timeframe for the document upload in the Adyen Customer Area is 18 days. 1.4 New VCR reason codes Reason codes will be renamed. Please find below the changes. Table 1: Current dispute reason codes Fraud Authorization Processing Errors Consumer Disputes 62 (Counterfeit Transaction) 81 (Fraud Card Present) 83 (Fraud Card Absent) 93 (Merchant Fraud Performance) 70 (Card Recovery Bulletin or Exception File) 71 (Decline Authorization) 72 (No Authorization) 73 (Expired Card) 78 (Service Code Violation) 74 (Late Presentment) 76 (Incorrect Currency or Transaction Code) 77 (Non-Matching Account Number) 80 (Incorrect Transaction Amount or Number) 82 (Duplicate Processing) 86 (Paid by Other Means) 30 (Services Not Provided) 41 (Cancelled Recurring Transaction) 53 (Not As Described or Defective Merchandise) 85 (Credit Not Processed) 90 (Non-Receipt of Cash or Load Transaction Value) Page Adyen BV

5 Table 2: New VCR dispute reason codes Note: Chargeback reason code 75 Transaction not Recognized is being retired. Fraud Authorization Processing Errors Consumer Disputes 10.1 EMV Liability Shift Counterfeit Fraud 10.2 EMV Liability Shift Non-Counterfeit Fraud 10.3 Other Fraud- Card Present Environment 10.4 Other Fraud- Card Absent Environment 11.1 Card Recovery Bulletin 11.2 Declined Authorization 11.3 No Authorization 12.1 Late Presentment 12.2 Incorrect Transaction Code 12.3 Incorrect Currency 12.4 Incorrect Account Number 12.5 Incorrect Amount 12.6 Duplicate Processing/ Paid by Other Means 12.7 Invalid Data 13.1 Merchandise/ Services Not Received 13.2 Cancelled Recurring 13.3 Not as Described or Defective Merchandise/ Services 13.4 Counterfeit Merchandise 10.5 Visa Fraud Monitoring Program 13.5 Misrepresentation 13.6 Credit Not Processed 13.7 Cancelled Merchandise/Services 13.8 Original Credit Transaction Not Accepted 13.9 Non-Receipt of Cash or Load Transaction Value 1.5 Request for Information (RFI) RFI requests remain unchanged and the merchant will continue to have 30 days to respond. In the Adyen Customer Area the timeframe to upload documents to defend RFI requests is 24 days. Page Adyen BV

6 Allocation If the issuing bank selects the Fraud and Authorization chargeback category, Visa will identify and block invalid disputes that do not meet the criteria of this flow. For example, fraudulent disputes on 3D secure authorized transactions, chargebacks exercised after the required timeframes, chargebacks on refunded transactions etc. This will result in less invalid chargebacks. If the chargeback is valid, Visa will assign liability to the merchant. Please be informed that the (automated) decision of Visa is based on data in the authorization and clearing logs, plus the information that is provided by the bank together with the chargeback. Visa system rules will compare this information against the Visa rules. Merchants are informed that dispute defense requirements are much stricter for VCR. In the past, merchants were allowed to upload screenshots of their internal systems without any proof of delivery. For VCR disputes, such evidence will be rejected. For Fraud and Authorization chargebacks the document upload in the CA will not be enabled for Hong Kong and New Zealand. Adyen is implementing this feature and it will be enabled for the second release date of April Merchants who receive VCR disputes as of October 2017 are advised to send the defense material to the Adyen APAC Risk Team on 2.1 Pre-arbitration and Arbitration After receiving the dispute defense documentation from the merchant, Adyen will initiate a Pre-Arbitration request, which is forwarded to the issuing bank. The issuing bank will review the merchant s defense material and has 30 days to respond by either accepting or declining the case. If the Pre-Arbitration is accepted, the issuer will return the funds to the merchant and the dispute cycle ends. If the issuing bank declines the Pre-Arbitration, merchant will be notified accordingly in the Adyen Customer Area. 2.2 Arbitration Arbitration is exercised when the merchant provided compelling evidence, but the issuer declined the Pre-Arbitration without a valid explanation. The merchant should reach out to the local Risk Team for this action. At Arbitration case filing stage, the case is forwarded to the chargeback comity of Visa who will review the whole case and will issue a final ruling. The losing party will be liable for a filing fee of USD Compelling evidence Allocation workflow For Authorization disputes, the general requirement is that if the issuing bank authorized the transaction the chargeback is invalid. Visa will block disputes where the merchant obtained an authorization. By default, all transactions are authorized by Adyen. If for some reason the issuing bank declines the authorization request, the merchant should not proceed with the payment. In any other case, the merchant should contact the Adyen Risk Team to dispute the chargeback Compelling evidence fraudulent disputes Please review the below table for more information on document requirements for fraudulent disputes. Page Adyen BV

7 Table 3: Compelling Evidence Fraud Compelling Evidence Fraud Card absent Environment 1 s or photographs, to prove a link between the shopper and the Cardholder, or to prove that the Cardholder is in possession of the merchandise and/or is using the merchandise or services 2 For an E-commerce Transaction in which the merchandise is collected from the Merchant location, any of the following: 1. Cardholder signature on the pick-up form 2. Copy of identification presented by the Cardholder 3. Details of identification presented by the Cardholder 3 For an E-commerce Transaction in which the merchandise is delivered, documentation (proof of delivery) that the item was delivered to the same physical address for which the Merchant received an AVS match of Y or M. A signature is not required as evidence of delivery. For digital goods downloaded from a Merchant's website or application, description of the services successfully downloaded, the date and time such services were downloaded, and 2 or more of the following: 4 1. Purchaser's IP address and the device geographical location at the date and time of the Transaction 2. Device ID number and name of device (if available) 3. Purchaser's name and address linked to the customer profile held by the Merchant 4. Evidence that the profile set up by the purchaser on the Merchant's website or application was accessed by the purchaser and has been successfully verified by the Merchant before the Transaction Date 5. Proof that the Merchant's website or application was accessed by the Cardholder for merchandise or services on or after the Transaction Date 6. Evidence that the same device and Card used in the disputed Transaction were used in any previous Transaction that was not disputed 5 For a Transaction in which merchandise was delivered to a business address, evidence that the merchandise was delivered and that, at the time of delivery, the Cardholder was working for the company at that address. A signature is not required as evidence of delivery. 6 For a Mail/Phone Order Transaction, a signed order form Page Adyen BV

8 For a passenger transport Transaction, evidence that the services were provided and any of the following: 7 1. Proof that the ticket was received at the Cardholder s billing address 2. Evidence that the ticket or boarding pass was scanned at the gate 3. Details of frequent flyer miles relating to the disputed Transaction that were earned or redeemed, including address and telephone number, that establish a link to the Cardholder 4. Evidence of any of the following additional Transactions related to the original Transaction: purchase of seat upgrades, payment for extra baggage, or purchases made on board the passenger transport 8 For Transactions involving a Europe Member, for an Airline Transaction, evidence showing that the name is included in the manifest for the departed flight and matches the name provided on the purchased itinerary For a Travel & Entertainment (T&E) Transaction, evidence that the services were provided and either: 9 1. Details of loyalty program rewards earned and/or redeemed including address and telephone number that establish a link to the Cardholder 2. Evidence that an additional Transaction or Transactions related to the original Transaction, such as the purchase of T&E service upgrades or subsequent purchases made throughout the T&E service period, were not disputed 10 For an E-commerce Transaction, evidence that the Transaction used an IP address, address, physical address, and telephone number that had been used in a previous, undisputed Transaction 11 Evidence that the Transaction was completed by a member of the Cardholder's household or family 12 Evidence of one or more non-disputed payments for the same merchandise or service in the past 13 For a Recurring Transaction, all of the following: 1. Evidence of a legally binding contract held between the Merchant and the Cardholder 2. Proof the Cardholder is using the merchandise or services 3. Evidence of a previous Transaction that was not disputed 14 In the Europe Region, evidence that the initial Transaction to set up a wallet was completed using Verified by Visa but any subsequent Transaction from the wallet that was not completed using Verified by Visa contained all wallet-related Transaction data. Page Adyen BV

9 Collaboration The process for the Collaboration workflow remains the same as it is today. The only difference will be the reduced timeframe of 30 days to defend chargebacks (merchant document upload in the Adyen Customer Area is 18 days) and the change in reason codes. 3.1 Compelling evidence Collaboration workflow Please review the tables on the next pages for more information on document requirements for Consumer Disputes and Processing Errors. Table 4: Compelling Evidence Merchandise / Services not received Compelling Evidence Merchandise/ Services not Received 1 2 s or photographs, to prove a link between the shopper and the Cardholder, or to prove that the Cardholder disputing the Transaction is in possession of the merchandise and/or is using the merchandise or services. For an E-commerce Transaction in which the merchandise is collected from the Merchant location, any of the following: 1. Signature of the cardholder on the pick up form 2. Copy of identification presented by the Cardholder 3. Details of identification presented by the Cardholder 4. Copy invoice 3 For an E-commerce Transaction in which the merchandise is delivered, documentation (proof of delivery) that the item was delivered to the same physical address for which the Merchant received an AVS match of Y or M. A signature is not required as evidence of delivery. For digital goods downloaded from a Merchant's website or application, description of the services successfully downloaded, the date and time such services were downloaded, and 2 or more of the following: 4 1. Shoppers IP address and the device geographical location at the date and time of the Transaction 2. Device ID number and name of device (if available) 3. Purchaser's name and address linked to the customer profile held by the Merchant 4. Evidence that the profile set up by the purchaser on the Merchant's website or application was accessed by the purchaser and has been successfully verified by the Merchant before the Transaction Date 5. Proof that the Merchant's website or application was accessed by the Cardholder for merchandise or services on or after the Transaction Date 6. Evidence that the same device and Card used in the disputed Transaction were used in any previous Transaction that was not disputed 5 For a Transaction in which merchandise was delivered to a business address, evidence that the merchandise was delivered and that, at the time of delivery, the Cardholder was working for the company at that address. A signature is not required as evidence of delivery. 6 For a Mail/Phone Order Transaction, a signed order form Page Adyen BV

10 For a passenger transport Transaction, evidence that the services were provided and any of the following: 7 1. Proof that the ticket was received at the Cardholder s billing address 2. Evidence that the ticket or boarding pass was scanned at the gate 3. Details of frequent flyer miles relating to the disputed Transaction that were earned or redeemed, including address and telephone number, that establish a link to the Cardholder 4. Evidence of any of the following additional Transactions related to that original Transaction: purchase of seat upgrades, payment for extra baggage, or purchases made on board the passenger transport 8 For Transactions involving a Europe Member, for an Airline Transaction, evidence showing that the name is included in the manifest for the departed flight and matches the name provided on the purchased itinerary 9 For a T&E Transaction, evidence that the services were provided and either: 1. Details of loyalty program rewards earned and/or redeemed including address and telephone number that establish a link to the Cardholder 2. Evidence that an additional Transaction or Transactions related to the original Transaction, such as the purchase of T&E service upgrades or subsequent purchases made throughout the T&E service period, were not disputed Evidence that the person who signed for the merchandise was authorized to sign for the Cardholder or is known by the Cardholder In the Europe Region, evidence that the Cardholder has been compensated for the value of the merchandise or services through another method Compelling evidence Consumer Disputes Please review the table for more information on document requirements for Consumer Disputes. Table 5: Compelling Evidence Consumer Disputes Compelling Evidence Consumer Disputes 1 2 Evidence, such as photographs or s, to prove that the merchandise or service matched what was described Documentation to prove that the cardholder did not attempt to return the merchandise Evidence that returned merchandise has not been received Evidence that the merchant tried to repair or replace merchandise/ services Evidence the cardholder no longer accepts the chargeback The merchant already processed a credit to the cardholders account Documentation to prove that the merchandise is not counterfeit A neutral third party opinion to support merchant s position The merchant already processed a credit to the cardholders account 13.3 Not as described or defective merchandise/ services 13.4 Counterfeit merchandise Page Adyen BV

11 3 Terms and Conditions were clearly communicated to the cardholder before the transaction was processed The merchant already processed a credit to the cardholders account 13.5 Misrepresentation 4 The cardholder no longer disputes the transaction The merchant already processed a credit to the cardholders account 13.6 Credit not processed 5 The merchant properly disclosed a Cancellation and Return policy on the check out page of it s website. The cardholder acknowledged the Cancellation and Return policy by selecting a tick box before checking out 13.7 Cancelled merchandise/ services Compelling evidence processing errors Please review the table for more information on document requirements for Processing Errors. Table 6: Compelling evidence processing errors Compelling Evidence Processing Errors 1 1. The transaction receipt or other document to prove that the transaction was settled within the required timeframe (not later than 180 days of the transaction date) 12.1 Late Presentment 2 Evidence that the merchant processed a credit to the cardholder s account 12.2 Incorrect Transaction Code 3 4 Evidence that the merchant processed a credit to the cardholder s account The cardholder no longer disputes the transaction Copy transaction receipt or other proof that the transaction currency was correct Evidence that the merchant processed a credit to the cardholder s account The cardholder no longer disputes the transaction Copy transaction receipt or other proof that the Account Number was processed correctly 12.3 Incorrect Currency 12.4 Incorrect Account Number 5 Copy transaction receipt or other proof that the transaction amount was correct 12.5 Incorrect Amount 6 Proof that the merchant processed two separate transactions for different orders (duplicate processing). Compelling evidence can be copy invoices of different orders Documents that the merchant did not receive payment by other means 12.6 Duplicate Processing/ Paid by Other Means Page Adyen BV

12 7 1. The authorization did not contain invalid data (please contact Adyen Chargeback Department for more information about the authorization) 12.7 Invalid Data Page Adyen BV