Business Customer Education Material | Prevent Chargeback Disputes | Electronic Money and Authorized Payment Institution | Template for FCA Applications and Authorised

• Avoid duplicate processing of a transaction and follow the proper procedures for settling your daily transactions.
• Work with the cardholder to resolve disputes regarding the quality of merchandise or services rendered.
• Refuse to process a transaction when you receive a Declined Code during Authorization.
• Call for Voice Authorization, if needed. Call for a Code 10 Authorization if you are still suspicious of the cardholder, card, or transaction after receiving an Approval Code.
• Include a description of the goods or services on the transaction Receipt.
• Deliver merchandise or services before charging the Card.
• Obtain an Authorization Code.
• Include the CVV2/CVC2 and AVS codes for card not present transactions, if applicable.
• Submit transaction receipts on the same day the transactions are authorized.
• Make sure an imprint appears on a manual transaction receipt or that the relevant transaction information appears on the terminal-generated transaction receipt.
• Not accept expired cards or cards having effective dates prior to the date of the Transaction.

Step 1: The cardholder files a complaint by contacting his or her issuing bank about the erroneous transaction.

Step 2: The issuing bank checks whether the dispute is valid. If the bank finds the request invalid, the dispute is simply declined and the customer is charged with a processing fee.

Step 3: If the issuing bank sees a potential error, a provisional credit is provided to the cardholder. The bank then initiates the usual chargeback process, to obtain credit from the merchant’s sponsoring bank.

Step 4: The merchant bank sponsoring the account then checks whether the chargeback is valid or not. They usually send you a notification to inform you of a pending chargeback request.

Step 5: The merchant’s sponsoring bank then does some research on the validity of the chargeback claim. If the chargeback is found to be invalid, they will decline said chargeback and inform the card-issuing bank.

Step 6: Assuming the chargeback is invalid, the amount of the chargeback is removed from the merchant’s account and the merchant’s bank will notify the merchant about the outcome.

Step 7: If a processing error has indeed occurred, the corresponding correction is then sent to the card-issuing bank for re-presentation.

Step 8: The merchant will be asked to provide the needed documentation and proof to remedy the chargeback. If the documentation provided is satisfactory, the claim for chargeback is denied and the customer will be charged once again for the sale. If the documents seem to be unsatisfactory, the chargeback amount will be provided to the customer.

(e-Commerce)

Look out for fraud warning signs (MOTO)

Here are some signs that a transaction is likely to be fraudulent. Get to know them and make sure that all members of your staff recognize them too. Sometimes the first sign of fraud can just be a general feeling that something isn’t quite right, If that happens, act on your instincts and don’t send out the goods until you’ve carried out further checks.

• Multiple or bulk orders – Watch out for customers buying lots of the same item – either in the same transaction or separately.
• First-time customers who place multiple orders – The risk of fraud is smaller when dealing with customers you know.
• High-value orders – Orders larger than normal may indicate fraud. High-value items such as jewelry or electrical goods are often targeted by fraudsters because they are easy to resell, so take extra care with this type of transaction.
• Hesitant customers – Customers who seem uncertain about personal information, such as their postcode or spelling of their street name, could well be using a false identity. Also watch out for customers being prompted when giving the requested information.
• Same name, different title – Could your customer be using the card of a family member?
• Sales that are too easy – Be suspicious if a customer is not interested in the price and/or detailed description of the goods, but is only interested in delivery times.
• Suspicious card combinations such as:
• Transactions on several cards where the billing address matches but different/various shipping addresses
• Multiple transactions on a single card over a very short period of time
• Multiple cards beginning with the same first six digits offered immediately after the previous cards are declined
• Customer offering multiple different cards one after another without hesitation when previous cards are declined
• Orders shipped to a single address but purchased with various cards
• Requests for urgent delivery – This could be genuine, but rush orders are common in fraud scams that aim to obtain goods for quick resale before the card is reported stolen.
• Overseas shipping address – Be careful when shipping overseas, especially if you are dealing with a new customer or a very large order.
• Different shipping address – Orders where the shipping address is different from the billing address may be legitimate (for example, when sending flowers or a birthday present) but requests to send goods to hotels, guest houses or PO boxes are often associated with fraud.
• Duplicate shipping address – Has the shipping address been used previously for similar orders? Be cautious if you identify the same delivery address being used.
• Requests to send funds abroad – This is typically a request for a money transfer or other payment method to pay for couriers, interpreters or other similar services or requests. For example, a request to take a payment greater than the value of the goods/services being purchased, where the customer requests the surplus funds to be sent overseas or to another bank.

• A risk alert from the payment service or acquiring bank. This indicates that there is a cause for concern and that further checks are required before an order is fulfilled.
• Multiple transaction attempts using the same or similar shopper details, such as name, e-mail address or IP address across one
• Different shopper details with one element the same – such as ten transactions from the same IP address giving different shopper names and e-mail addresses.
• Multiple cards used by same shopper, especially where the card numbers are similar.
• Obvious ‘card testing’, where the last four or eight digits of cards in a series of attempted payments contain similar numbers, or the card numbers are cycled repeatedly in a rough pattern or sequence.
• Nonsensical shopper details, such as ‘namef@domain.com’ as a shopper e-mail address or ‘name’ as a shopper name or billing address
• High-value transactions, especially where the amount is out of the ordinary for your usual daily processing amounts.
• Mismatching Card Security Code (CSC) or mismatching Address Verification Check (AVS). Consider rejecting orders that carry mismatches or carry out further checks.
• Mismatching combination of billing country, issuer country and IP country, especially where any one of these is from a high-risk area/country such as Nigeria, Ghana, Indonesia or Venezuela.
• A delivery country that’s out of the ordinary for your business and regarded as high-risk
• Use of ‘freemail’ e-mail addresses, such as Yahoo!, Hotmail, MSN, Gmail, Live or YMail. Although these e-mail services are completely legitimate, they are often associated with fraud attempts because they are easily available and relatively anonymous.
• An e-mail address that bears no relation to the shopper name.
• A request to hurry the order shortly after it has been placed.
• A request to send anything of the same value.
• Indiscriminate buying or unusually large orders that seem out of the ordinary.
• A request to change the delivery address, especially to a high-risk area/country (see above).
• Shoppers who give card numbers by e-mail and seem reckless with sensitive information. Sending full card numbers by unencrypted e-mail is not PCI-DSS-compliant.
• Shoppers who give a high number of card details or lots of different billing information.
• A request to conceal or alter payment details, or the way in which the payment is made, to make it look more legitimate.
• General inconsistency between the shopper’s name, e-mail address, or the way they communicate and the kind of goods or services being purchased.