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TERMS AND ABBREVIATIONS
1. Designated employee – Employee of the HIRETT to whom the HIRETT has delegated the obligation to examine Customers’ claims.
2. Compliance laws, rules and standards – laws and other legislative acts regulating the performance of the HIRETT, standards set by self-regulating institutions, related to the activity of the HIRETT, professional codes of conduct and ethics and other standards of good practice related to the activity of the HIRETT.
3. Employee – a physical person who has actual legal relationship with the Agent based on a labour contract or other legal arrangement, including members of the Board.
4. Internal normative documents – documents that are issued by the HIRETT and which regulate the performance of the HIRETT, separate structural units or employees, for instance, policies, procedures, regulations, instructions.
5. Customer – person, who is utilizing one or more of the services provided by the HIRETT.
6. Administration – The structure of HIRETT whose responsibilities includes record – keeping function.
7. Procedure – this Dispute Management Procedure.
8. HIRETT (also “we”) – Hirret Ltd.
9. Claim – any type of document (application, complaint, claim, etc.) that is submitted by the Customer and that contains the claim (complaint, dispute).
10. Arbitration – Review conducted by Mastercard, Visa, or Discover to determine the responsibility for a chargeback related dispute.
11. AVS – A cardholder verification tool designed to reduce the risk of card-not-present (CNP) transactions in mail and telephone orders. AVS helps reduce the risk of accepting fraudulent transactions by facilitating verification of the cardholder’s billing address with the card issuer. Verification results help the merchant deter.
12. Open arbitration event – HIRETT feature that indicates the issuing bank has rejected the merchant’s representment or dispute and is filing a second chargeback in an effort to continue the dispute and recapture the associated funds.
13. Cardholder – The person to whom a financial transaction card is issued or an additional person authorized to use the card.
14. Chargeback – The reversal of a charge against a Cardholder’s account initiated by the issuing bank.
15. Chargeback period – The number of calendar days (counted from the transaction processing date) during which the issuer has the right to charge the transaction back to the acquirer. The number of days varies from 45 to 180 days depending upon the type of transaction.
16. Chargeback process – A mechanism used by an issuing bank either on behalf of or at the request of a cardholder to remove a charge from the Cardholder’s account and to recover the funds.
17. First chargeback cycle – The sequence of events encompassing the first chargeback issued by the credit card company or issuing bank to the merchant. When the merchant receives the first chargeback they have the option to accept the chargeback or dispute and represent it back to the issuing bank.
18. Issuer – Any Discover, Mastercard, American Express or Visa member, or a commercial organisation that establishes and maintains customer credit lines accessed through the use of a card.
19. Merchant – Any entity that sells products or services to their customers.
20. Representment – An action used when a merchant wants to dispute liability (responsibility) for a chargeback. The merchant should attach supporting documentation to the chargeback case prior to taking this action.
21. Representment cycle – The sequence of events that occur when a merchant chooses to dispute a chargeback and the transaction is sent back to the credit card issuer to reverse the chargeback.
22. Arbitration – An action used when the Acquirer continues a dispute beyond the arbitration chargeback based upon the merits of the case.
23. Pre-arbitration – An action used when submitting an arbitration chargeback to an issuing bank for review. Pre-arbitration is a less formal process than arbitration involving only HIRETT and the Issuing bank.
24. Reason code – A code used to provide additional information regarding the nature of a chargeback, subsequent presentment, fee collection, funds retrieval request – The request from the issuer to the acquirer either for an original or legible copy of the transaction information document or for a substitute draft.
1 PURPOSE OF THE DOCUMENT
Effective complaints handling is a key part of customer service excellence and HIRETT is not afraid to tackle this complex and difficult subject. Every single current and potential customer is important and valuable for the company and HIRETT believes that customers have the right to a fair, effective and courteous service at all times. Therefore, customer comments are extremely important for HIRETT. HIRETT want to know what its customers and persons interested in its services think about its performance and the standard of services it provides – not only do they allow HIRETT to improve its individual service to customers in terms of quality and efficiency but customers also help HIRETT enhance its product.
How to Make a Complaint:
If something has gone wrong with the level of service provided, HIRETT encourages every customer to bring this to the attention of our Customer Service Department by logging into his or her account and submitting their complaint via HIRETT online Support Centre. Alternatively, HIRETT can be reached via mail, fax or telephone:
Hirett Ltd
1111 Old Street, Suite 15, London, United Kingdom, EC1V 9LT
Telephone: ______________
Fax: _______________
Information customers need to provide:
1. Name;
2. Login email address and any reference such as transaction identification number
3. Contact details such as email address or phone number;
4. A clear description of the complaint and details on what customer would like us to do to put it right.
The department’s Dispute Management Procedure describes ways of doing work that can help to prevent and manage disputes and avoid some matters escalating unnecessarily into formal legal disputes. The Procedure presents a recommended approach to dispute management organised around three practical Objectives:
1. Identify and manage complaints early;
2. Foster a culture of active dispute management, where department truly engages with customers in dispute, and;
3. Record and use information about disputes in an appropriate and meaningful way.
By following the guidance in this Procedure, line areas within the department will be able to provide a level of assurance that an actual or potential dispute has been managed appropriately, and will be able to contribute to effective dispute management across the department by recording key information.
Through these means, this Procedure is intended to avoid disputes being unnecessarily prolonged or entrenched and to prevent avoidable litigation and financial loses, thereby improving relationships, and avoiding waste of resources.
The Dispute Management Procedure is designed to provide useful guidance in a wide range of situations including:
1. in planning, how will company communicate with customers it come in contact with in daily operations;
2. in planning, how company structure decision making processes in which the department is involved in responding to inquiries, representations, complaints, threats of legal action and legal proceedings.
A core standard underpinning this Procedure is one of proportionality. The time and resources devoted to dispute management should be proportionate to the circumstances.
How HIRETT Handles Customer Complaint:
HIRETT Customer Service Team provided with detailed information of the difficulty that has arisen will always aim to resolve the matter to our customers’ entire satisfaction fairly, efficiently and promptly.
Stage 1: When HIRETT have received customer complaint, he or she will receive a prompt acknowledgement verbally or in writing within 48 hours. If HIRETT receives enquiries via email, he or she will attach HIRETT answer with a unique ticket number that allows every customer to follow up on his/her complaint.
Stage 2: HIRETT will then confirm details of the action it has taken. Customer will be kept informed of the status of the case however a final response to Customer’s complaint may take up to 8 weeks.
Stage 3: There may be occasions, however, where a Customer is not satisfied with the response he/she has received. If this is the case the Customer’s complaint may be referred to a more senior individual within the area of our Customer Service Management. Where necessary, the complaint will be referred by the more senior member of staff to an individual in higher authority with a view to resolving the matter. If Customer Are Still Not Satisfied HIRETT is committed to resolving complaints whenever possible through our complaints procedures. If a matter cannot be resolved satisfactorily, Customer may be entitled to refer the complaint to the Financial Ombudsman Service. This would depend on the nature of the complaint and whether within the rules of the Service the person making the complaint is “eligible” to refer the matter to the Ombudsman (within the eligible timeframe of 6 months set by them). The Ombudsman Service exists to provide independent adjudication and investigation will be undertaken prior to making a decision about outstanding disputes.
Alternatively, the Ombudsman can be contacted direct at the following address:
Financial Ombudsman Service
Exchange Tower
London E14 9SR
Telephone: 0800 023 4567 or 0300 123 9123
E-mail address: complaint.info@financial-ombudsman.org.uk
For further information Customer may visit the Financial Ombudsman Service website at: www.financial-ombudsman.org.uk
Hiring your own Solicitor or a third-party complaints handling firm
HIRETT has made its complaints handling procedure open, clear and easy to follow and even if it should not be necessary for you to seek professional help, it is your right that you appoint a Solicitor or a third-party complaint handling firm to assist you in resolving your dispute. If Customer chooses to employ a Solicitor, complaints handling firm, Financial Adviser or other as your representative, this does not affect the way we review your complaint:
• HIRETT does not charge Customers to investigate its complaint in accordance with the stages described in this document;
• HIRETT will not be liable for any costs incurred if Customer decide to employ a Solicitor or a third-party complaint handling firm or individual;
• In the instances where a complaint is upheld and redress is due, HIRETT will only make payment to the respective account holder even if they have been represented by a third party.
2 PROCEDURE OVERVIEW
This procedure is a guide for HIRETT in accepting, responding to and resolving Customer disputes.
Considerations:
All HIRETT employees and Board Directors are given information about the dispute settling process as part of their induction.
Procedure Steps:
In the first instance, a dispute should be resolved between the complainant and respondent.
Where the dispute cannot be resolved between the two parties through an informal process, a formal dispute resolution procedure will be undertaken.
Formal Dispute Resolution:
The complainant makes formal notification by lodging documented details of the dispute and with their direct supervisor.
Where the dispute is about their direct supervisor, the complainant shall lodge the dispute with the next in line supervisor or with the CEO/Manager, or the Board President depending on dispute level.
The person who has received formal notification of a dispute shall acknowledge receipt of the dispute in writing within five (12) working hours.
The person managing the dispute shall interview the complainant to clarify allegations and details, ascertain desired outcome(s), and advise of the process to be followed within five (5) working days.
The person managing the dispute shall assess the allegations in the context of HIRETT policies and relevant legislation, identify whether there is a legitimate complaint, and whether the Dispute is the appropriate under which the situation should be addressed.
The respondent to the Dispute shall be informed of the Dispute allegations as soon as possible and provided with opportunity to respond to the allegations within ten (10) working days.
The person managing the Dispute may interview other parties only if relevant to the Dispute allegation and that a conflict of interest or bias does not exist.
The person managing the Dispute may propose a resolution, allowing both the complainant and the respondent opportunity to comment. An agreed resolution may include:
• Providing more information on why an original decision was made or process was used;
• Remedying an identified mistake or providing further clarification to an issue;
• Revoking a decision;
• Changing a policy or procedure or reinforcing existing policy or procedure;
• Reconsidering an application or request;
• Return of funds;
• Providing all or individual Board members, staff with training, counselling or information.
Other actions that may be appropriate.
After action has been taken to resolve the Dispute, and no further response is received from the complainant, the Dispute is considered closed.
Where a Dispute remains unresolved, the person managing the Dispute may seek a more senior staff member to contribute to the resolution process. Additionally, external mediation may be undertaken in an attempt to resolve the dispute.
Withdrawing a Grievance Complaint:
The complainant may withdraw the Dispute complaint at any time through written notification.
The person managing the Dispute shall notify all relevant parties that the Dispute has been withdrawn.
A record of the Dispute complaint and withdrawal shall be kept.
Documentation:
All details of a formal dispute are to be documented by the person managing the dispute. Details are to include:
• Dispute allegations;
• Respondent’s response;
• Any informal resolution actions previously undertaken;
• Proposed and actual formal resolution actions;
• Outcomes and further recommendations;
• Dispute closure details (dated and signatured by all parties).
Documentation related to a Dispute is not to be disclosed to parties outside of the Dispute management process.
Documentation related to a Dispute shall be kept in the complainant’s and respondent’s personnel file for a period of two (2) years. After which time, if no further incident has occurred, the documentation may be securely destroyed.
3 CHARGEBACKS REGISTRATION & DISPUTE CONTROL PROCESS
Chargeback process is used by an issuing bank either on behalf of or at the request of a Cardholder to remove a charge from the Cardholder’s account and to collect back funds. The issuing bank or the Cardholder can initiate a chargeback for various reasons including clerical errors, such as duplicate billing, to fraud claims which may be associated with identity theft. The chargeback may be preceded by a request for information called a retrieval request. The intention of this Procedure is to provide information concerning the chargeback process, including retrieval requests, and to help the merchant in their decisions concerning which chargebacks to dispute and how to do so successfully.
The chargeback registration associated with payment cards transactions and dispute process control is described below:
1. The Payment card user can dispute the transaction made on the Internet. The dispute complaint forms are received from the Payment card issuer through International payments organizations;
2. Processing of a transaction dispute case is done in line with the requirements of International payments organizations;
3. To control number and volume of chargeback a CRM employee each month prepares a complaint report on each Customer, by calculating proportion of Dispute complaint forms of the total number or operations each month for each e-shop of a Customer and each Customer. The reports are prepared according to the regulations and requirements of the International payments organizations;
4. Along with a quantitative analysis of the disputed Transactions, with increase of the indicators, CRM carries out the qualitative analysis: respective documentation is inspected which was the basis for the dispute. CRM indicates a reason, explanation, essence of the problem and inspects action of the respective Customer though placement of a request or giving requirements for improvement of a web-page;
5. When a daily file with Dispute complaint forms (First Chargeback or Chargeback) is received from FD, the CRM at the same day forwards the respective reports to contact persons indicated in the Agreement. With a receipt of the file in HIRETT, the International payments organizations debit HIRETT corresponding account and HIRETT debits the Customer’s Current account within the same day with the respective amount and commission charge indicated in the Agreement. The amounts disputed in HIRETT registration are shown in transit accounts until the situation is clarified;
6. In cases when the Customer considers that the transaction is disputed without solid grounds, the Customer has to inform CRM on Dispute complaint forms they do not accept and are willing to dispute against, as well as they have to submit the necessary information for disputing the Dispute complaint form;
7. Following receipt of information indicated in Item 6 the CRM verifies within 5 (five) business days:
• whether in line with the regulations of the International payment organizations a term has not passed when the Transaction disputation report may be disputed against.
• verifies whether in line with the regulations of the International payment organizations the information sent by the Customer is sufficient for disputing the Dispute complaint form.
8. In case the CRM is unable to make independent decision or it is possible to dispute against the Dispute complaint form, he/she should turn to the AML and Risk department head for a consultation;
9. In case after the actions mentioned in Item 7 and in case of necessity also after consultation mentioned under Item 8 a decision is made that the Dispute complaint form can be contradicted, the CRM employee fills in an application for contradiction of the Dispute complaint form (Second Presentment or Rep-resentment) and sends it to FD. After the application for Dispute complaint form contradiction (Second Presentment or Re-presentment) is processed, the International payments organizations credit the HIRETT corresponding account with the Transaction amount;
10. In case after the actions mentioned in Item 7 and in case of necessity also after consultation mentioned under Item 8 a decision is made that the Dispute complaint form cannot be contradicted, the CRM employee informs the respective Customer on a necessity to accept the Dispute complaint form.
11. If after a period of 45 (forty-five) calendar days following actions indicated under Item 2.9 no report is received with additional information (Arbitration Chargeback or Pre-Arbitration) from the International Payments organizations, then the Dispute manager transfers the amount of the disputed Transaction in the Customers Current account;
12. If within a period of 45 (forty-five) calendar days following actions indicated under Item 2.9 no report is received with additional information (Arbitration Chargeback or Pre-Arbitration) from the International Payments organizations, the CRM informs the Customer on the received reply and together with the Customer assesses the situation and makes a decision for contravening the Dispute complaint form, continuation or termination of the review process (hereinafter in the text – Review process). In case of a necessity the CRM has to turn to the AML and Risk Department head for a consultation;
13. If after activities indicated under Item 12 a decision is made to terminate the Review process, the CRM in line with the requirements of the International payments organizations prepares a financial report on chargeback of the disputed Transaction amount to the issuing bank of the Payment card and sends it to FD for further processing. The International payments organizations debit the HIRETT corresponding account with the Transaction amount;
14. In case after actions indicated under Item 12 a decision is made to continue the Review process, the CRM employee prepares a reply according to the requirements of the International payments organizations and sends it to FD for further processing;
15. In case after actions indicated under Item 14 no information is received within the term specified by the International payments organisations on Arbitration Case or Arbitration, then the Dispute manager transfers the disputed Transaction amount to the Customer’s Current account;
16. In case after actions indicated under Item 14 further information is received within the term specified by the International payments organisations on Arbitration Case or Arbitration, the CRM employee informs the Customer on the received reply and together with the Customer assesses the situation and makes a decision on continuing or termination of the Review process. In case of a necessity the CRM has to turn to the
AML and Risk Department head for a consultation:
• In case after actions indicated under Item 16 a decision is made to continue the Review process, the CRM prepares a reply according to the requirements of the International payments organizations and sends it to FD for further processing. Further on this case is reviewed by the International payments organisations (special committees) and make a decision on the responsible party.
17. If after activities indicated under Item 16 a decision is made to terminate the Review process, the CRM employee in line with the requirements of the International payments organizations prepares a financial report on chargeback of the disputed Transaction amount to the issuing bank of the Payment card and sends it to Processing centre for further processing. The International payments organizations debit the HIRETT corresponding account with the Transaction amount;
18. After actions indicated under Item 17:
• In case the International payments organizations make a decision that the responsible party is HIRETT, then the CRM employee informs the Customer on termination of the Review process; prepares a financial report on chargeback of the disputed Transaction amount to the issuing bank of the Payment card and sends it to the Processing centre for further processing; the International payments organizations debit the HIRETT corresponding account with the Transaction amount;
• On case the International payments organizations make a decision that the responsible party is the issuing bank of the Payment card, then the CRM informs the Customer on termination of the Review process and transfers the disputed Transaction amount to the Customer’s Current account;
19. The CRM carries out a regular control of balances of transit accounts “Assets for clarification” and “Liabilities for clarification” in the registration system and receives e-mails from the Dispute manager on transferred amounts. In case of necessity the CRM prepares an Order for mutual closure of amounts that are transferred to transit accounts (Assets in clarification, Liabilities in clarification) and submits it for execution to the Dispute manager;
20. In case of necessity the CRM submits a transcript of balances of transit accounts “Assets in clarification” and “Liabilities in clarification” to the Back Office.
4 CHARGEBACK AND FRAUD DISPUTES
To prevent instances of chargeback and fraud disputes, here are some useful suggestions:
1. Make sure that you provide your customers with all possible contact information and good customer service. This way, you will encourage them to channel their complaints to you first, before calling up their issuing bank to request a chargeback;
2. Be clear with your return policy, as well as your shipping policies, and make sure that your customer clearly understands them before transacting with you;
3. Aside from verifying the billing address and security code, request the name of the card issuing bank as one of your purchasing policies. Failure to provide this will be a big red warning flag;
4. Always send confirmation emails to your customer. These should be automated ones which contain the invoice. Once shipped, send another confirmation e-mail providing shipping details and tracking information;
5. When the shipping address is different from the billing address, try to confirm the information and exercise extra caution;
6. Many consumers ask for a chargeback when they do not recognize the charge being made on their credit card statement. Thus, make sure that your company name and a clear transaction description will be reflected on their bill;
7. While these methods are ways for preventing fraudulent transactions and for winning chargebacks, they are not sometimes enough in the real-world setting;
8. This is because what causes most chargebacks is not fraud, identity theft, processing errors or the like.
Most common Chargeback and fraud codes, reports from International Card organisations:
There are three types of reports: chargebacks (file name consists CHB), fraud (fraudulent transactions, file name consists FRAUD) and retrieval requests (file name consists RR).
On fraud reports do not reply. These messages merchants and bank use as markers of possible problematic issues during the working process. In some cases, the Bank may request an explanation from the merchant about any of the issues.
You should observe the time to analyse the process of the issue and to send a request to challenge chargebacks and related documentation in timely manner – not later than 2 weeks from the date of receipt of the request.
If a merchant believes that the chargebacks exposed unnecessarily, he has a right, to send to the Bank appropriate document (documents confirming a deal, report from the e-shop, that the service or product has provided and challenge chargebacks (both MasterCard, or by VISA). The application against chargebacks have to be sent to the same bank’s email, from which merchant received the report about the chargeback.
Application have to be written in free form – description of situation, ID number of transaction.
Regarding the necessary documentation to challenge chargebacks – it all depends on the particular Reason Code and of particular issue.
5 SHORTLY ABOUT MOST COMMON REASON CODES
VISA
30 – Services Not Provided or Merchandise Not Received – This chargeback occurs when a Merchant was either unwilling or unable to provide services or shipped merchandise was not received. This chargeback may be reversed if you can provide proof that the services were rendered to the cardholder, proof of delivery for the merchandise purchased, or evidence the credit was issued. This chargeback can be avoided by waiting to charge the customer until after the service has been provided or the merchandise has been shipped.
41 – Cancelled Recurring Transaction – This chargeback occurs when a Merchant continued to charge a Cardholder for a Recurring or Pre-Authorized Health Care Transaction despite cancellation notification, or Transaction amount is not within preauthorized range. This chargeback may be reversed if you can provide evidence of credit issued, or evidence containing the cardholder signature with the correct cancellation date. This chargeback can be avoided by promptly removing the billing cycles from customers who cancel your services.
75 – Cardholder Does Not Recognize Transaction – This chargeback occurs when the Cardholder does not recognize the Transaction. This chargeback may be reversed if you can supply information or documentation to assist the cardholder in recognizing the transaction or evidence that a credit was issued.
82 – Duplicate Processing – This chargeback occurs when a customer claims they have been charged multiple times by an establishment when there is only one valid transaction. This chargeback may be reversed if you can supply a signed and imprinted/swiped sales draft for each transaction processed, along with an explanation and description for items purchased during each transaction or evidence credit was issued.
83 – Fraudulent Transaction – Card-Absent Environment – This chargeback occurs when a customer does not recognize the transaction and is stating they did not authorize the charge to their credit card. This chargeback may be reversed if the Merchant is 3D secure or if you are delivering goods to he Cardholder and you have a signature that he has received them.
85 – Credit Not Processed – This chargeback occurs when a customer claims they are due a credit from your establishment that has not been processed. This chargeback may be reversed if you can supply proof that a credit has been issued to the cardholder, or supplying any documentation related to this transaction along with an explanation as to why the credit was not issued.
MasterCard
4837 – No Cardholder Authorization – This chargeback occurs when a customer does not recognize the transaction and is stating that they did not authorize the charge to their credit card. This chargeback may be reversed if the Merchant is 3D secure or if you are delivering goods to the Cardholder and you have a signature that he has received them.
4841 – Cancelled Recurring Transaction – This chargeback occurs when a customer states they have cancelled the recurring services and, therefore, should not have been charged for this transaction. This chargeback may be reversed by supplying evidence of credit issued, or evidence containing the cardholder signature with the correct cancellation date. This chargeback can be avoided by promptly removing the billing cycles from customers who cancel your services.
4853 – Cardholder Dispute – Defective/Not as Described – This chargeback occurs when a customer claims the service or merchandise they received does not conform to the description they were given. This chargeback may be reversed by supplying proof that the cardholder received the goods or services which fit the description at the time of the purchase, proof that the deficiency that led to this dispute has been corrected, a statement that cardholder neither returned or attempted to return merchandise, or evidence that a credit was issued. This chargeback can be avoided by insuring the customer clearly understands what they are purchasing and is aware of any applicable return or refund policies.
4855 – Non-Receipt of Merchandise – This chargeback occurs when a customer claims they have paid for items that were to be delivered from your establishment but have not yet been received. This chargeback may be reversed by supplying proof that the customer has received the expected merchandise or evidence that a credit was issued. This chargeback can be avoided by waiting to process the charge to the customer’s credit card until the merchandise has been shipped.