From April the 13th 2018, Visa introduced a new initiative called Visa Claims Resolution (VCR), which has replaced the previous chargeback process.
This new initiative was introduced in order to simplify dispute resolution, reduce the timeframes and improve efficiency of handling disputed transactions.
Visa Claims Resolutions (VCR) is designed to migrate from the existing Chargeback litigation-based process to a liability assignment model. Using existing data and new data modelling, Visa assess each disputed transaction and assign liability, speeding up the end-to-end timeframe for resolution and reduce the number of incorrect dispute cases.
The previous 22 chargeback reason codes have been replaced with new reason codes which are grouped into 4 categories, Fraud, Authorization, Processing Error and Consumer Disputes.
|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
10.5 – Visa Fraud Monitoring Program
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/
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
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
Note: Reason code ‘75 - transaction not recognised’ has been retired, as the issuer will now have greater insight into the transaction and associated transaction history.
There are now two different dispute workflows, called Allocation and Collaboration and depending on the dispute category, a dispute will fall into one of these workflows.
For’ Fraud’ and ‘Authorization’ disputes, Visa will assign them to the Allocation workflow where the merchant will no longer be able to raise a representment, but will still be entitled to open a pre-arbitration if they have compelling evidence that support their case.
If the dispute is for a ‘Processing Error’ or a ‘Consumer Dispute’, then this will follow the Collaboration workflow and allow the merchant to respond to the dispute in the same way as the previous representment process.
Visa have also changed the terminology they use, so Chargebacks will now be called Disputes and Representments simply become Dispute Responses. These new terms are used throughout the Account Management System including statement, reports and alert emails, allowing the merchant to clearly see when a dispute has been processed via Visa Claims Resolution (VCR).
Merchants must make any necessary procedural changes to their dispute resolution process to comply with the Visa Claims Resolution (VCR) initiative.
For further information about the benefits of Visa Claims Resolutions, please refer to the VCR Merchant Benefits PDF
For more information about chargebacks/disputes and how to protect yourself against fraud download our Dispute Management Guide