Please be advised that starting April 13, 2018, Visa has implemented several changes to the chargeback rules and regulations (VCR). The full list of changes will become available in the “Visa Core Rules" and the "Visa Product and Service Rules”. This documentation is available from Visa, however, in order to better prepare you for the changes, we have prepared a summary below:
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Terminology Changes
- Beginning on April 13, 2018, Visa chargebacks are referred to as “disputes”, while re-presentments (responses to chargebacks) are referred to as “dispute responses”. These changes in terminology will be reflected in the chargeback notification letters which are sent to you by mail and fax.
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Dispute Groups
- Visa has created two distinct categories of chargebacks, based on the nature of the dispute and has implemented different dispute response processes for the two groups. Disputes that are generated due to fraud and authorization reasons are now called “allocation” disputes, while those that are generated as a result of processing errors and consumer disputes are referred to as “collaboration” disputes.
The new disputes, as well as the dispute groups they fall under, are shown below:
Allocation Disputes
Fraud Related Disputes
VCR Category and Condition Code |
Condition Code Explanation |
Previous Chargeback Reason Code |
10.1 |
EMV Liability Shift Counterfeit Fraud |
62 |
10.2 |
EMV Liability Shift Non-Counterfeit Fraud |
81 |
10.3 |
Other Fraud – Card Present Environment |
81 |
10.4 |
Other Fraud – Card Absent Environment |
83 |
10.5 |
Visa Fraud Monitoring Program |
93 |
Authorization Related Disputes
VCR Category and Condition Code |
Condition Code Explanation |
Previous Chargeback Reason Code |
11.1 |
Card Recovery |
70 |
11.2 |
Declined Authorization |
71 |
11.3 |
No Authorization |
73 |
Collaboration Disputes
Processing Errors
VCR Category and Condition Code |
Condition Code Explanation |
Previous Chargeback Reason Code |
12.1 |
Late Presentment |
74 |
12.2 |
Incorrect Transaction Code |
76 |
12.3 |
Incorrect Currency |
76 |
12.4 |
Incorrect Account Number |
80 |
12.5 |
Incorrect Amount |
80 |
12.6.1 |
Duplicate Processing |
82 |
12.6.2 |
Paid by Other Means |
86 |
12.7 |
Invalid Data |
72 |
Consumer-Related Disputes
VCR Category and Condition Code |
Condition Code Explanation |
Previous Chargeback Reason Code |
13.1 |
Merchandise/Service Not Received |
30 |
13.2 |
Cancelled Recurring |
41 |
13.3 |
Not as Described or Defective Merchandise/Services |
53 |
13.4 |
Counterfeit Merchandise |
53 |
13.5 |
Misrepresentation |
53 |
13.6 |
Credit Not Processed |
85 |
13.7 |
Canceled Merchandise/Services |
85 |
13.8 |
Original Credit Transaction Not Accepted |
85 |
13.9 |
Non-Receipt of Cash or Load Transaction Value |
90 |
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Response to Allocation Disputes
- Beginning April 13, 2018, any merchant responses to an allocation dispute require compelling evidence in order to demonstrate that a transaction has been authorized (i.e., proof of product delivery to an AVS matched address, proof of manual credit card imprint, proof that a cardholder is not disputing the transaction, etc.), and also require that Paya initiates a pre-arbitration on your behalf in order to respond and request a review of the evidence. Simple re-presentments to allocation disputes are not possible. Once a pre-arbitration is completed with the issuing bank, that party can accept or deny the evidence, at which point, Paya can file a request for arbitration on your behalf. Please be advised that additional fees would be assessed if an arbitration results in a decision in favor of the issuing bank/cardholder ($500.00 per dispute).
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Reduced Timeframe
- Visa has reduced the allowed time for a dispute response to be filed, from 45 days to 30 days. As always, we continue to recommend that you respond to a dispute notification letter within 10 days, in order to allow our chargeback department time to process the response and submit it on your behalf.
Chargeback notifications will continue to be mailed or faxed, however, the letters will be titled “allocation debit advice”, and “collaboration debit advice”. Any questions can be directed to the chargeback department at 1-866-637-5467.
