Visa Claims Resolutions

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.

What is Visa Claims Resolutions (VCR)?

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 changes for Visa Claims Resolutions

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.

Allocation Collaboration
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/
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

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.

Allocation

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.

Collaboration

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 Claims Process Diagram

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