Dispute Resolution Forum - Presentation

VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only October 2011 Dispute Resolution Best Practice Guide

Visa Europe Dispute Resolution Forum

Presentation Material Forum: September 2011

VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only Dispute Resolution Forum – Presentation Guide

September 2011 ii

Visa Europe Dispute Resolution – Presentation Material The Visa Europe Dispute Resolution Forum took place on Monday 26th and Tuesday 27th September 2011. This document provides the presentation materials and forum minutes as a reference tool for Issuers and Acquirers. We hope this information helps members with their back-office operations. Information from the feedback sessions and meeting minutes will follow.

Visa Europe is committed to providing regular dispute-related information to assist Acquirers and Issuers. The Dispute Resolution Team will publish a series of newsletters to assist Members and their Dispute Teams. These will be published on VROL from December 2011. The date of the next Dispute Resolution Forum will also be announced on VROL.

For all disputes, it is important to follow the applicable Visa Europe Operating Regulations (or any other dispute-related member letters or best practice documents) and provide proper supporting information / documentation.

Dispute Resolution Contact Details

E-mail: [email protected]. Provide your feedback: [email protected]


September 2011 iii

Table of contents Dispute Resolution Statistics ..................................................................................... 1

Dispute Resolution Rule Changes ............................................................................ 6

Mobile / Contactless and Dispute Resolution ......................................................10

Fraud Trends ............................................................................................................... 21

VbV and RC 30 .......................................................................................................... 35

Fraud and VROL......................................................................................................... 38

London 2012 Olympic Disputes.............................................................................. 45

Compliance – Best Practices ................................................................................... 48

Dispute Resolution Forum Minutes ....................................................................... 58


September 2011 1

Dispute Resolution Statistics

Presentation Identifier.1Information Classification as Needed 1Visa Europe Member use onlyVisa Europe Dispute Resolution Forum

VE Transactions vs. Chargebacks

0.025

0.0280.031

0.033

0.0410.039

0.0270.030

0.034 0.033

0.039

0.0220.0240.023

0

0.005

0.01

0.01 5

0.02

0.025

0.03

0.035

0.04

0.045

January

February

March

AprilMay

JuneJuly

Month

%

201 0

201 1


Top 5 Chargebacks RC % vs. RepresentmentsVE Issued Cards vs. VE and VI Acquirers

59.33

23.4019.99

13.48

3.295.096.27

12.54

26.40

7.014.56

7.17

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

RC83 RC75 RC30 RC41 RC72 Other

RC

%

% RC vs total Chbks

% Repr. Vs Chbks per RC


2 September 2011


Visa Europe Cases Filed

2010 - Arb Cases = 86.71% / Comp Cases = 13.29%

2011 - Arb Cases = 66.91% / Comp Cases = 33.09%

172

7084 74

5978

120

289

113

224

142 137115 117

9796 89

160

89

0

50

100

150

200

250

300

350

Jan

FebMarc

hApr

ilMay

June Ju

lyAug

Sept

OctNov Dec

Month

Vol2010

2011


Visa Inc Cases Filed

2010 - Arb Cases = 89.73 % / Comp Cases = 10.27 %

2011 - Arb Cases = 89.05 % / Comp Cases = 10.94 %

237

354

310

189

230

262247

230246

196212

232

204

251

0

50

100

150

200

250

300

350

400

Jan Feb Mar Apr May Jun Jul

Month

Vol2010

2011


September 2011 3


Visa Europe Filed Case Amounts

387

182 170

314

241 240

66

375

173

40

0

50

100

150

200

250

300

350

400

450

0 - 249 250 - 499 500 - 999 1000 - 4999 5000+

Euro

Vol

2010

2011


Visa Inc Filed Case Amounts

504

381

985

104

525

428478

71

481

1007

0

200

400

600

800

1000

1200

0 - 249 250- 499 500. - 999 1000 - 4999 5000

USD

Vol

2010

2011


4 September 2011


Visa Europe Top 5 Reason Codes Filed Win/Loss Ratio

4750

41

74

26

59

50

26

74

53

0

10

20

30

40

50

60

70

80

RC30 RC83 RC81 RC75 RC85

2011

VolIssuer Wins Acquirer Wins

69

35 36

50

73

6465

50

2731

0

10

20

30

40

50

60

70

80


2010

Vol Issuer Wins Acquirer Wins% %


VE Issuer – VI Acquirer Top 5 Reason Codes Filed Win/Loss Ratio

75

21 23

787376

79

222624

0

10

20

30

40

50

60

70

80

90


2011

Issuer Wins Acquirer Wins

65

2521

78

58

7975

22

4235

0

10

20

30

40

50

60

70

80

90


2010

Issuer Wins Acquirer Wins% %


September 2011 5


VI Issuer – VE AcquirerTop 5 Reason Codes Filed Win/Loss Ratio

74

22

35

55

6964

76

44

3126

0

10

20

30

40

50

60

70

80


2011

Issuer Wins Acquirer Wins

76

31

40

66

76

60

69

34

2424

0

10

20

30

40

50

60

70

80


2010

Issuer Wins Acquirer Wins% %


Visa Europe Average Days to Close Cases

53

45 4549 50

6259

54

64636061 62

535351

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug

Month

2010

2011

Days


6 September 2011

Dispute Resolution Rule Changes


Cardholder Activation Transactions

● Type A, B & C

● The current rules for transactions at Unattended Acceptance Terminals (UAT's) were developed prior to the Visa Europe 2005 EMV liability shift.

● The rules were intended to bridge the gap between the migration from acceptance at magnetic stripe unattended devices to those which were EMV compliant. The three CAT types identified, are as follows:

- Type A

- Type B

- Type C

● From 15th October 2011, the defined terms for CAT type A, B and C transactions will be discontinued.


New Unattended Acceptance Terminals Rules

● For transactions dated 15 October 2011, the rules for deploying and managing UAT's will become effective.

UAT's will be split into the following categories:

● Not Authorised - for magnetic stripe transactions above merchants floor limit

● Authorised Offline – for chip cards below the floor limit which allow offline authorisation

● Authorised Online – for transactions in excess of the floor limit

● Floor limits will be introduced for UAT's to manage authorisation and help determine liability


September 2011 7


Unattended Acceptance Terminal Rules

Not authorised

● A zero floor limit will apply to all transactions initiated with a magnetic stripe at a UAT, with the following exceptions:

- MCC 4111 - Local and suburban commuter passenger transport including ferries

- MCC 4112 - Passenger railways - MCC 4131 - Bus lines - MCC 4784 - Tolls and bridge fees - MCC 7523 - Parking lots, parking meters and garages

● A floor limit of €40, or local currency equivalent, will apply to transactions initiated with a magnetic stripe at a UAT using these MCC's within Visa Europe. ● For transactions initiated outside of Visa Europe, a floor limit of US $25 or local currency equivalent will apply.


Unattended Acceptance Terminal Rules

Authorised – Offline (Chip initiated transactions)

● Chip initiated transactions may be approved offline, providing that the transaction amount does not exceed the floor limit and the issuer has personalised the card to allow this.

● A floor limit of €40, or local currency equivalent, will apply to chip initiated transactions at a UAT within Visa Europe. However, domestic variances may be applicable.

Authorised Online – for transactions in excess of the merchants floor limit


8 September 2011


Telephone Service Transactions and Fulfilment

Telephone Service Transactions at Unattended Acceptance Terminals

● A transaction in which a Cardholder uses a Card to purchase a telephone call as defined under MCC4814● This includes both Magnetic Stripe and Chip transactions.● Merchants floor limits are defined per country.● RC 72 – No Authorisation is now applicable for transactions above floor limit

Fulfilment

● Effective from 15 October 2011, as part of a Fulfilment, an Acquirer is not required to provide the requesting Customer or Member with a Transaction Receipt for a transaction at an Unattended Acceptance Terminal.


Dispute Resolution - Unattended Terminal Rules

●Reason Code 96-Transaction Exceeds Limited Amount will be removed.

● Reason Code 72-No Authorization will be updated such so Transactions at UAT’s that do not receive the required Authorization may be charged back.

● However, for magnetic stripe initiated transactions at UAT’s with the following MCC’s, Reason code 72 will be valid for the full amount of the transaction:

- MCC 4111 - Local and suburban commuter passenger transport including ferries

- MCC 4112 - Passenger railways

- MCC 4131 - Bus lines

- MCC 4784 - Tolls and bridge fees

- MCC 7523 - Parking lots, parking meters and garages


September 2011 9


10 September 2011

Mobile / Contactless and Dispute Resolution


Pilot

Study phase

Consumer rollout

Over 130K acceptance points and counting…

•Iceland•Norway

•UK•Ireland

•Germany

•Finland

•Sweden

•France•Austria

•Poland

•Slovakia

•Hungary

•Czech Rep

•Lithuania

•Estonia

•Latvia•Denmark

•Italy

•Spain

•Portugal

•Turkey•Greece

•Romania

•Luxembourg

•Netherlands

•Belgium

•Bulgaria

•Switzerland

•Cyprus

•Israel

•Slovenia

• 14m Cards• 60,000 Terminals• 6 issuers in 2011

• 2.4m Cards• 45,000 Terminals• 11 issuers

• 240k Cards• 2,000 Terminals• 7 issuers

• 3.3m Cards• 20,000 Terminals• 13 issuers

• 100k Cards• 1,000 Terminals• 4 issuers

• Launching in 2011

• Launched in May 2011

• 200k Cards• 2,000 Terminals

• Launching in Q2 2011

Mobile project

Contactless and Mobile Acceptance Infrastructure is growing rapidly


The Opportunity

130 MillioniPods

800 MillionPCs

1.3 Billion Internet Users

2 Billion Visa Cards

2.5 Billion TVs

Source: GSM Association; ICT Research; Morgan Stanley – Global Internet Trends

4.8 BillionMobile subscribers

130 MillioniPods

800 MillionPCs

1.3 Billion Internet Users

2 Billion Visa Cards

2.5 Billion TVs

Source: GSM Association; ICT Research; Morgan Stanley – Global Internet Trends

4.8 BillionMobile subscribers1.3 billion new mobile devices sold globally in 2010

1 billion+ smartphones expected in the market by 2011

3.5bn users of mobile Internet in 2015 vs. 400m today

1.5 billion unbanked mobile subscribers today vs. 2.5 billion estimated by 2012

Mobile payment estimated at $170 billion in 2010 growing to $640 billion in 20141

Source: GSMA (Feb 2009), ITU (2010), Global Wireless Data Market Update-2009, Chetan Sharma Consulting, March 2010, Les Echos (May 2010)


September 2011 11


Our vision: Our consumer’s life is enriched by the Visa Mobile experience

“My life is enriched by a portfolio of payments-related mobile services. I can use my mobile to make all types of payments – in a shop, at an on-line retailer and to transfer money to another person – securely and easily…. AND I get

other exciting and valuable mobile services…all delivered by someone I trust!”

+ New and unknown … including service enhancements due to location based functionality

“I always have my mobile phone with me and I can use

it to pay contactless everywhere. It is so fast and easy. It also enables me to store and use tickets that I

bought directly with my mobile”

“I can now shop online wherever I am. It is easy and secure.” “Sending or

receiving money has never been that fast

and easy.”

“I feel protected and informed as I will know immediately if

someone is misusing my card.”Balance enquiry

“I am in control of my money as I can access my balance and track my spend

quickly and easily wherever I am.”

Loyalty“I feel appreciated and can save money as I receive compelling offers that are relevant to me.”

NFC Mobile WebPerson to

person

Alerts in real time

… all available from any device and any operator…

Consumer


Balance enquiry“I am in control of my money as I can

access my balance and track my spend quickly and easily wherever I am.”


Our vision: Our consumer’s life is enriched by the Visa Mobile experience


View and redeem all merchant offers and coupons received

View all transactions, analyse spend and verify the received alerts

Make a Person to Person money transfer

Manage Visa Mobile Account general settings and preferences

Account balance always available

Electronic receipts

Mobile contactless payments

Consumers will have an integrated range of payments-related services

• any device• any operator

Location based services


12 September 2011


What’s needed for mobile contactless


MMCMMC MMC WithMMC WithNFCNFC

SIM CentricSecure element is the SIM

Mobile CentricSecure element embedded on the handset

Micro SD Memory CardSecure element on the micro-SD card

Accessory or micro SD Memory card with antennaContains both SE and antenna

For secure mobile payments, a chip or “Secure Element” in the device is needed – an antenna is also need for contactless payments


Contactless Card High Value Paymentwith online PIN


Consumer holds his/her phone to the contactless symbol on the reader

Consumer enters PIN on the terminal

€ 23.50

Payment is confirmed


September 2011 13


Mobile Contactless High Value Paymentwith passcode pre-entry – preferred method


Consumer presses the ‘Pay now’ button

Consumer is prompted for his/her passcode to authenticate, enters it and is asked to hold his/her phone to the contactless symbol on the reader

Payment is confirmed and consumer can choose to add information on the transaction


£ 23.50


Mobile Contactless High Value Paymentwith passcode entry


Transaction is initiated and consumer is prompted to holds his/her phone to the contactless symbol on the reader


Payment is confirmed and consumer can choose to add information on the transaction

Reader directs consumer to his/her phone

Consumer is prompted for his/her passcode to authenticate, enters it and is asked to hold his/her phone back to the contactless symbol on the reader

Consumer holds again his/her phoneto the contactless symbol on the reader

£ 23.50

£ 23.50


14 September 2011


Bridging technologies


iCarte AccessoryExclusivity for EuropePartnership with producer of iPhone clip-on to transform iPhones into payment devices Target banks, key retailers and operators Pilots to begin Q3 10; VI type and Apple approval in progress

Micro-SD cards with antennasExclusivity for EuropeEasy set-up and distribution based on standard card production processesmicro-SD card makes any phone with a memory card slot contactless-enabledPilots to begin end Q3 10; VI type approval in progress


Commercialisation: where we are


Fulfils a genuine need

Simple, easy to use for mass market

Value for money for the customer

Standards and regulation

Reliable technology

Ease of set up

Ecosystem distributes value sustainably

Incumbents motivated by new value

Consumer behaviour and needs Technology

and standards

Commercial viability

Global trials indicate overwhelming consumer demand

Security still a concern but wanes with habit and usage

Unlikely to find a “one size fits all” business model for all markets

Some models exist but agreements still not finalised

Today Today

Today

Deployment of contactless acceptance infrastructure key

Launch of card programmes to drive usage, habit and pave way for mobile

Supply of mobile phones that consumers want

Testing, approvals and certification


September 2011 15


2.1.1 Terminal and High Value Payments


The latest Visa Europe contactless specification version 2.1.1 (released in June 2009) provides improved functionality that ensures both the card and terminal estate is equipped for the new contactless products launching over the next few years2.1.1 terminals enable payment with mobile devices where a cardholder’s passcode can be entered to authenticate a high-value paymentPasscode ensures global interoperability and cannot be supported on 2.0.2 terminalsVisa will introduce a mandate to ensure new terminal deployments are able to accept mobile payments as they enter mainstream issuance over the next couple of years. Specifically

All terminal deployments in merchants new to contactless must support the VCPS specification version 2.1.1 (or later) from 1st June 2012. Acquirers systems must be configured to support high value transactions from 1st October 2012. All new terminal deployments must support the VCPS specification version 2.1.1 (or later) from 1 January 2014All installed and activated contactless terminals must support the VCPS specification version 2.1.1 (or later) from 1 January 2014


2.1.1 Terminal and High Value Payments


The latest Visa Europe contactless specification version 2.1.1 (released in June 2009) provides improved functionality that ensures both the card and terminal estate is equipped for the new contactless products launching over the next few years2.1.1 terminals enable payment with mobile devices where a cardholder’s passcode can be entered to authenticate a high-value paymentPasscode ensures global interoperability and cannot be supported on 2.0.2 terminalsVisa will introduce a mandate to ensure new terminal deployments are able to accept mobile payments as they enter mainstream issuance over the next couple of years. Specifically

All terminal deployments in merchants new to contactless must support the VCPS specification version 2.1.1 (or later) from 1st June 2012. Acquirers systems must be configured to support contactless high value transactions from 1st October 2012. All new terminal deployments must support the VCPS specification version 2.1.1 (or later) from 1 January 2014All installed and activated contactless terminals must support the VCPS specification version 2.1.1 (or later) from 1 January 2014


16 September 2011


Contactless CVM-required limits


Visa Europe is enabling higher-value contactless transactions with CVMVisa Europe-issued contactless cards can only support online-PIN as the CVM for contactless transactionsVisa Europe-issued Mobile payment cards must support Consumer Device CVM andmay support online-PIN as CVM

The Visa Europe contactless CVM-required limit is €20. Issuers are liable for all contactless transactions up to and including this limit

Domestic markets may agree a different contactless CVM-required limit up to a value of €35This limit applies to all contactless transactions undertaken in the marketDomestic issuers and acquirers agree liability for domestic transactionsAcquirers accept liability on the full amount for any non-domestic card contactless no-CVM transactions above €20Mature 2.1 terminal and card environment (3+ years) will enable terminals to recognise non-domestic cards and apply the €20 CVM-required limit to those transactions

Contactless transactions with approved CVM have the same chargeback protection as Chip with CVM transactions

Includes contactless transactions by non-Visa Europe cards where signature is indicated to be used as CVM by the card or mobile device


Prepaid online authorised contactless transactions


Domestic contactless no-CVM transactions must be offline authorised for debit and credit products

Applies to both contactless cards and Mobile payment cardsGuarantees speed of transaction and interopobility

Visa Europe are allowing prepaid contactless transactions to be always-online authorised

Applies to both contactless cards and Mobile payment cardsWill not work on Visa Transit Solutions Known Fare implementations e.g. TFL BusesCan work on Visa Transit Solutions Known Fare implementations e.g. TFL Tube if ODA performed – only possible for cards on VCPS 2.1


September 2011 17


Contactless – Low value Transactions

● The small ticket program provides chargeback liability protection to acquirers for transactions less than or equal to US $25 completed without cardholder verification. (Domestic variances applicable)

● This program ensures Acquirers are protected from lost and stolen fraud even if PIN or signature is not obtained.

● The following transaction must not be processed:- Transactions with DCC- Account Funding Transactions- Cash-Back Transactions- Manual Cash Transactions- Quasi Cash Transactions- Prepaid Load Transactions

+



● Contactless transactions which are below the CVM threshold can be disputed as follows:

12085Credit not Processed

12082Duplicate Processing

12074Late Presentment

7572No Authorisation

7571Declined Authorisation

12053Not as Described or Defective Merchandise

12030Services not Provided or Merchandise not received

Time LimitReason Code

Description of Chargeback


18 September 2011



● The following Chargeback Reason Codes do not apply to Contactless Transactions:

- 73 – Expired Card

- 77 – Non - matching Account Number

- 80 – Incorrect Transaction Amount

● Due to the nature of contactless transactions, Chargeback Reason Codes 30 –Services / Merchandise not received and RC 53 – Not as Described / Defective are very rarely disputed.


Contactless – Higher Value Payments

● Currently, transactions which exceed the €20 maximum transaction amount for a contactless transaction, (i.e. €20.01 and above) default to contact (Chip and PIN) and the current existing dispute resolution rights.

● Potentially, all existing chargeback rights which apply to Chip & PIN verified transactions could be utilised.

● Higher Value Payments will enable cardholders to pay for items above the current maximum transaction amount.

● Cardholders may be able to use online PIN to verify a contactless transaction. (If applicable)


September 2011 19


Contactless – Higher Value Payments

●Where online PIN cannot be verified, the transaction will default to contact (Chip and PIN)

● The Visa Europe Dispute Resolution team are involved in reviewing the VEOR with contactless principles for both Low and Higher Value Payments.

● These rules will be implemented and published before the introduction of HVP acceptance in June 2012.


Future Changes

Mobile Dispute Resolution Rules● Passcode is a CVM performed by the cardholder on the mobile device and verified by the issuer offline as a valid CVM.

● A Passcode is different to a PIN because a merchant or an acquirer will not receive or handle a Passcode and it is not transmitted as part of an authorisation request.

● However, a successful validation message will be sent

● For higher value payments, authenticating via the Passcode must take place.

● Online PIN verification will be requested as a preferred CVM (if applicable)

● No CVV data will be displayed on the mobile device.

● The Dispute Resolution team are currently reviewing the mobile rules.


20 September 2011


Future Changes

Transit solutions● Over £4bn is spent on bus, tube and commuter rail tickets annually in the UK alone. Transit operators are keen to accept bank-issued cards for payment directly on buses and at transit fare gates.

● Visa Europe has developed the Visa payWave Transit Solution. These include:

- Known Fare – the fare to be paid is known at the start of the journey, either because it is flat or because the cardholder defines their destination

- Distance-based Fare – final fare is determined by the distance travelled and is not known at the start of the journey but can be calculated as the cardholder leaves the system

- Variable Fare - the final amount to be charged is not known until after several journeys, often not until the end of the travelling day

• The Visa Europe Dispute Resolution team are involved in reviewing the VEOR for possible transit solutions chargeback variances.


September 2011 21

Fraud Trends


Visa Europe - Issuing: Fraud to Sales Rate

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

0.40%

0.45%

0.50%

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

UK

France

Germany

Sw eden

Republic ofIreland

Visa Europe


Visa Europe - Acquiring: Fraud to Sales Rate

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

UK

France

Germany

Sw eden

Republic ofIreland

Visa Europe


22 September 2011


Top 30 Issuers

The top 30 issuer represent 70% of total fraud losses.

Our target: 40 Million Euro Reduction

The top 30 issuers in Visa Europe represent 69% of total fraud losses

Our target: 40 million Euro Reduction

69%Top 30 issuers

31%All other issuers

Year ending March 2010 top 30 issuers = 542 million Euro


Visa Europe Issuing: Largest Fraud Drivers: Year Ending March 2011

Card not present

60% of total fraud

Counterfeit Cards

19% of total fraudCounterfeit cards

€146m - 22% of total fraud

Card Not Present€352m - 54% of total fraud


September 2011 23


Visa Europe - Issuing: Split of Fraud by Fraud Type

€0

€20,000,000

€40,000,000

€60,000,000

€80,000,000

€100,000,000

€120,000,000

€140,000,000

€160,000,000

€180,000,000

€200,000,000

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

FRD APPL

MISC

NRI

STOLEN

LOST

CNTRFEIT

ACCT USE


Visa Europe - Issuing: Top 10 MCCs by Fraud Type for Quarter Ending March 2011

€0

€2,000,000

€4,000,000

€6,000,000

€8,000,000

€10,000,000

€12,000,000

€14,000,000

€16,000,000

€18,000,000

€20,000,000

FINANCIAL INST/AUTO CASH

FINANCIAL INST/MERCHANDISE

BETTING/TRACK/CASINO/LOTTO

TELECOMMUNICATION SERVICES

GROCERY STORES/SUPERMARKETS

TRAVEL AGENCIES

ELECTRONICS STORES

DEPARTMENT STORES

PROFESSIONAL SERVICES - DEF

COMBINATION CATALOG & RETAIL

STOLEN

NRI

MISC

LOST

FRD APPL

CNTRFEIT

ACCT USE


24 September 2011


8 Strangest Fraud MCCs

Child Care Services €15k

Bowling Alleys €13k

Veterinary Services €97k

Wigs & Toupees €92k

Fines€670k

Opticians €780k

Dentists€443k

Health & Beauty €447k

Health & Beauty €281k


VE Issued Card Present vs Card Not Present Fraud

2010 Q12010 Q2

2010 Q32010 Q4

2011 Q1

0

10

20

30

40

50

60

70

80

90

100Millions Euros

Card Present Card not Present


September 2011 25


23%

29%

7%

12%

16%

6%

41% 42%

13% 12%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Q1 2010 Q1 2011

Perc

ent o

f Tot

al F

raud

MOTO ECI 1-4 Fully Authenticated VbV ECI 5Merchant Attempted VbV ECI 6 Unsecure E-Com ECI 7-9Not Defined

Visa Europe Issuing CNP Fraud by ECI (% of Total)


Cross Border vs Domestic CNP Fraud: Visa Europe Issuing – Year Ending March 2011

Vs

55% - €193mDomestic

13% - €45mInter

Regional

32% - €115mIntra

Regional


26 September 2011


Incorrect Fraud Reporting

Why is accurate fraud reporting important?

• Visa fraud figures

• Enables Visa to identify trends

• Impact on fraud reduction efforts

• Internal MI

• Impact on chargeback possibilities

What are the fraud reporting issues?

• Analysis of fraud reported as CNP

• 1 in 55 overall reported fraud transactions are clearly misreported

• POS 90 (Full mag) listed as CNP

• POS 02 (Mag stripe read) listed as CNP

• POS 5 (Chip read) listed as CNP

• ATM transactions listed as CNP


Bank A - Issuing: Top 10 MCCs by Fraud Type: Quarter Ending March 2011

€0

€50,000

€100,000

€150,000

€200,000

€250,000

€300,000

€350,000

€400,000

€450,000

€500,000


ELECTRONICS STORES

DEPARTMENT STORES

TELECOMMUNICATION EQUIPMENT

DISCOUNT STORES

VIDEO AMUSEMENT GAME SUPPLY

DRUG STORES & PHARMACIES


SHOE STORES

WOMENS READY TO WEAR STORES

COUNTERFEIT


September 2011 27


Country A - Issuing: Split of Fraud by Fraud Type

€0

€200,000

€400,000

€600,000

€800,000

€1,000,000

€1,200,000

€1,400,000

€1,600,000

€1,800,000

2009 Q2

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

STOLEN

NRI

MISC

LOST

FRD APPL

CNTRFEIT

ACCT USE


Bank B - Issuing: Top 10 MCCs by Fraud Type: Quarter Ending March 2011

€0

€10,000

€20,000

€30,000

€40,000

€50,000

€60,000

€70,000

€80,000

€90,000

€100,000

FINANCIAL INST/AUTO CASH

ELECTRONICS STORES


OTHER DIRECT MARKETERS

TRAVEL AGENCIES


CATALOG MERCHANT

COMPUTER SOFTWARE STORES

PROFESSIONAL SERVICES - DEF

DEPARTMENT STORES

STOLEN

NRI

MISC

LOST

FRD APPL

CNTRFEIT

ACCT USE


28 September 2011


Bank B - Issuing: Split of Fraud by Fraud Type

€0

€500,000

€1,000,000

€1,500,000

€2,000,000

€2,500,000

€3,000,000

€3,500,000

2009 Q2

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

STOLEN

NRI

MISC

LOST

FRD APPL

CNTRFEIT

ACCT USE


Recent Fraud Attacks

Methods of Attack:

●ATM skimming, card & cash trapping

●Unattended terminals

●Ghost terminals

●Refund fraud


September 2011 29


ATM Skimming, Card & Cash Trapping

● Skimming – Still represents the majority of ATM fraud

● Card trapping – Lebanese loop, shoulder surfing or camera to view PIN, then retrieve card

- In many recent cases a mobile phone camera has been used to record the PIN

● Cash trapping – Withdrawal as normal but cash ejection is prevented due to device/sleeve placed inside ATM

- Many reports this year of cash trapping in the UK. EAST has stated it is becoming more prevalent across Europe

- Anti cash trap kit deployments have been effective but have moved the problem elsewhere

● Anti fraud techniques – ASDs, cameras, law enforcement liaison, cardholder education (e.g. ‘Cover your PIN’ image, cash machine fraud awareness day, report devices not working/dispensing cash)


Unattended Terminal Fraud

● Unattended terminals are all vulnerable to skimming and compromises at unattended terminals have increased across Europe:

- Train tickets/stations particularly targeted in UK and Nordics

- Petrol stations

● Anti fraud techniques – As with ATMs, installing ASDs and cardholder awareness are important


30 September 2011


Ghost Terminals

What?

● Fake terminals sometimes replacing genuine devices

Where?

● Sweden, possibly Netherlands and UK

● Low value outlets: Coffee shops / festivals / taxis

Detection?

● Difficult to identify CPP

● Cardholder reports transactions not on card / Police interception of fake terminals


Refund Fraud

● Collusive merchants issuing refunds with no corresponding authorisation OR

● Criminals obtain merchant credentials and submit refunds to the acquirers system which are then processed

● Issuer 1st party / mule / ACTO account used to access refund prior to detection

● Pressure on issuer to release funds

● Acquirers and Issuers should have appropriate measures in place to identify refunds without a corresponding authorisation


September 2011 31


Evolving Risks

The Threat is a constant we have to live with…


A Few Recent Events…

A few news images from the web, highlighting the coverage such stories are getting these days – very different from the days when such stories were relegated to niche ‘techy’reports…


32 September 2011


And Yet More Of The Same…


Fraud Solutions

There is no single solution, it’s a combination of activities:

●KYC - know your customer

●Secure card data and card delivery

●Payment Card Industry Data Security Standards (PCI DSS)

●Authorisation strategies and detection systems

●Sharing Best practices

●Merchant and cardholder education

●Chip technology

●Verified by Visa

●Moving from static to dynamic authentication

●Scheme fraud control programmes


September 2011 33


Visa Europe EMV Rollout Levels

341 millions Visa chip cards at end Q1 2011:

●Represents 80% of the issuing portfolio

Visa transactions originating from EMV devices May 2011:

● 84.6% of intra-regional cross-border POS CEV

- 77% of POS CEV is chip-to-chip

● 98% of intra-regional cross-border ATM CEV

- 93.1% of ATM CEV is chip-to-chip


VbV Rollout in Visa Europe

● 130 million+ Visa cards enrolled within Visa Europe

● Visa Europe VbV penetration - 47% of all e-Commerce transactions, of which 88% fully authenticated

● ECI5 Fraud to Sales ratio = 9bps v. 33bps ECI6-9

● VbV delivered estimated fraud savings of €225m for members in 2010


34 September 2011


Summary

●As an industry we are up against sophisticated organisations

● Losses are coming down but we must not be complacent due the migratory and dynamic nature of Fraud

●Effective tools and solutions are available to help

● Innovation is vital too but must be undertaken in a considered manner

●Keep on doing what we are doing as its working


September 2011 35

VbV and RC 30


Verified By Visa (VbV) liability shift – RC 30 and ECI 5 and 6

● Visa Europe are aware of several Issuers attempting to avoid the VbV liability shift.

● Most transactions flagged with ECI 5 or 6 are exempt from fraud chargebacks. - (Except in cases where the transaction was initiated on a International

Commercial Card, Anonymous prepaid card or took place in a New Channel (e.g. non-HTML mobile) or with a merchant participating on the Global Merchant Chargeback Monitoring Programme (GMCMP).

● In an attempt to by-pass the VbV liability shift, Issuers are attempting to chargeback transactions which have been VbV authenticated under the following non-fraud reason codes:

RC 30 – Services Not Provided or Merchandise Not Received RC 90 – Non-Receipt of Cash or Load Transaction Value at ATM or Load Device


VBV liability shift – RC 30 and ECI 5 and 6

Issuers must not use RC 30 and RC 90 when the transaction has been identified as fraud in an attempt to bypass the VbV liability shift

Benefits of VbV:

●Subscribing to VbV means that Merchants are protected against fraudulent transactions

●The integrity of the Verified by Visa brand as a leading CNP prevention tool

● Issuers should encourage their Cardholders to sign up to the service. (If applicable)


36 September 2011



Acquirer Action

● Acquirer’s can attempt to invalidate at Representment by evidencing Transactions were asserted to be fraudulent by the cardholder

● Transaction has been fraud reported (TC40).

● Acquirer’s should also provide documentation (whenever possible) to prove that the Cardholder received the purchased services/merchandise.



Visa Action● If Issuers continue to avoid the VbV liability shift , Visa Europe could look to

monitor all chargebacks affected

● Chargebacks to be monitored and Visa could look at other indicators to determine if an Issuer has bi-passed the liability shift including:- TC40- Card Account Number Exception file listing - Check for other fraud chargebacks around the chargeback CPD

●Work with Issuers directly to try and reduce the number of chargebacks under RC 30 which are not Services not rendered or merchandise not receive.

Compliance programme● Members may be subject to fines if in breach of a compliance programme.


September 2011 37

Presentation Identifier.87Information Classification as Needed 87Visa Europe Member use onlyVisa Europe Dispute Resolution Forum 87Tesco 2011

Questions to ask

What to ask if no Fraud chargeback rights• Is the transaction amount above floor limit? If so, has it been authorised?

– may have chargeback right under RC72 (No Authorisation).

• Has the card expired? May have chargeback right under RC73 (Expired Card).

• Has the transaction been processed within the required time limits? May have chargeback right under RC74 (Late Presentment).

• Action a Retrieval Request to check the transaction receipt for signature and if legible.

• If account number or amount is illegible may have chargeback right under RC60 (Illegible Fulfilment).


38 September 2011

Fraud and VROL


VROL and fraud reporting

VROL can be used to:

• Report fraud

• Review and amend fraud reports (Issuers only)

• Exception File Listing

• Review and amend Exception File entries


The Fraud Reporting Wizard

From the Transaction Inquiry results screen, select a case and create a chargeback questionnaire.


September 2011 39



Select ‘Guide Me’ to open the Fraud Reporting Wizard



Select the appropriate topic and click on ‘Next’. Repeat until the Fraud Type has been determined by the wizard.


40 September 2011



The Fraud Type is included in the questionnaire.


The Past


September 2011 41


The Past


The Present


42 September 2011


The Future…

…is to further improve our Dispute Resolution system.

• Constant improvements

• Acknowledge new technologies and processes

• Easier handling of Dispute Resolution cases.


Benefits of VROL

• VROL helps you to keep everything related to your dispute in one place under one unique case number.

• It is easy to follow a dispute from the start to the end.

• Transaction information can be easily accessed using Transaction Inquiry.

• Fraud reporting and Exception File listing are easier.


September 2011 43


Current improvements

• The extensive data available in Visa Transaction Research Service (VTRS) will gradually be integrated into the VROL’s databases which means that the same data will be available in Transaction Inquiry (TI).

• Questionnaires are being amended to reflect changes to the Visa Europe Operating Regulations.

• Using the Multi-match wizard, users are now able to create several questionnaires at once by selecting multiple advices in the ‘All Unresolved CB/Repre Doc Advices’ queues.


The Good Faith Resolution Report (ROL-175)

• This report provides members and Visa Europe with an overview of Good Faith attempts that have been raised.

• With this report Visa Europe is monitoring the Good Faith traffic to see which of them are related to the Payment Services Directive (PSD).

• Please ensure that you use the two buttons within the Good Faith questionnaire, when the case is out of time and related to PSD.


44 September 2011


The Good Faith Resolution Report (ROL-175)


September 2011 45

London 2012 Olympic Disputes


London 2012 Olympic Tickets

● The London Organizing Committee of the Olympic and Paralympic Games (LOCOG) is responsible for preparing and staging the 2012 Games and is the sole provider of official Olympic tickets for the 2012 games.

● LOCOG has been alerted to the fact that certain companies/individuals are fraudulently claiming to be associated with London 2012 and are claiming to provide official tickets through websites that are not associated with LOCOG.

● The LOCOG website may assist cardholders who may be concerned that they have purchased tickets through an unofficial source.


London 2012 Olympic Tickets –Ticketing Website Checker

http://www.london2012.com/about-this-website/ticketing-website-checker.php

● This website will provide information on:- Known unauthorised websites claiming to offer London 2012 tickets- Official London 2012 ticket sites

Authorised Ticket Resellers (ATRs) have been granted the right actively to promote and sell tickets in the country of the European National Olympic Committee which appointed them.


46 September 2011


London 2012 – Cardholder’s FAQs

● Who should a Cardholder contact if I have a query about a purchase?- If you have a query about an item you have purchased or wish to purchase,

please contact a the LOCOG customer service team either by email: [email protected] or telephone 0845 605 2012 (UK) or +44 170 486 2012 (International)

● How will I be able to pay ?- Visa (credit, debit and prepaid) is the only payment card method accepted

at The London 2012 Olympic Games.● How will a Cardholder know if something is an official London 2012 product?

- If a product is genuine London 2012 Games merchandise it will feature a numbered holographic version of the official London 2012 logo as part of the packaging or labelling. This is your guarantee of authenticity.

For further information, please refer to www.london2012.com



Services not rendered - Reason code 30

● The Reason Code 30 chargeback right covers several situations including non-receipt of tickets and the supply of unofficial tickets by the merchant which fail to provide entry to the venue/event.

● Chargebacks for future dated Olympic events are only valid under RC 30 when LOCOG has identified the merchant as an unofficial provider


September 2011 47



Credit not processed - Reason code 85● The Reason Code 85 chargeback may be used when a credit voucher has not

yet been posted to the cardholder’s account. Issuers must wait 15 days from the date on the credit voucher prior to exercising this chargeback.

● A cardholder may also have a right to cancel tickets purchased from an unofficial ticket merchant if the cancellation policy was not disclosed to the cardholder at the time of the transaction.

Not as described - Reason code 53● The Reason Code 53 chargeback may be used when the cardholder receives

tickets for an event, date or venue which differs from that originally agreed with the merchant at the time of the transaction.

+


48 September 2011

Compliance – Best Practices

Presentation Identifier.143Information Classification as Needed 143Visa Europe Member use onlyVisa Europe Dispute Resolution Forum 143

What is compliance?

Operating Regulation is broken

Financial loss

No Chargeback rights

Compliance case


The definition of Compliance

● A process whereby disputes that arise from violations of any rules governing a Transaction (when the requesting Customer or Member can certify that a financial loss has occurred or will occur for a specific amount), and no Chargeback right is available, are determined.*

*Visa Europe Operating Regulations Volumes I & II, Defined Terms.


September 2011 49


The definition of financial loss

● A financial loss can be defined as “A debit or loss of funds suffered by a member, cardholder or merchant which has occurred due to a violation of the Visa Europe Operating Regulations”

● A member may choose to evidence a financial loss by providing proof of the debit transaction from the cardholder or merchants account; or evidence that the member can not recover the funds from their cardholder or merchant.

- For example; Cardholder bank statement.


Compliance facts

To file a Compliance, a member must:

• File a Compliance case using Visa Resolve Online (VROL)

• Attempt a Pre-Compliance. This is mandatory – No direct Compliance

Potentially every rule within the V.E.O.R. can result in a Compliance case.


50 September 2011


Compliance – Best practice

A member is required to:

● Cite the rule violation within the pre–compliance questionnaire

● Evidence its financial loss

● State how that rule was violated, thereby causing a financial loss

For cases that relate to fraudulent activity, supporting documentation is required.

(Member letter: VE 48/09)


Time limits

A compliance must be filed within 90 calendar days of either:

● Central Processing Date of the transaction (CPD).

● Violation Date.

● Date of Discovery.

A compliance can be filed up to 90 calendar days from the date either the Issuer or Acquirer discovered the violation; or from when the Issuer or Acquirer received notification from their Cardholder / Merchant that a violation may have occurred. (Not to exceed 2 years from the transaction CPD)


September 2011 51

Delayed or Amended Charges


Delayed or Amended Charges - Best practice

Section 5.3.B of the V.E.O.R., Volume I

The following items are applicable to delayed or amended charges:

● Consent to be liable.

● Estimate of the charges for damages

● Time frame for the cardholder to be advised of the delayed or amended charge


52 September 2011



Consent to be liable.

● A merchant must evidence within the signature area that the cardholder has consented to be liable for damage, parking and traffic violations.

● For damages this must also mention that the charge shall be taken specifically from the cardholder’s Visa card.

● If the consent to be liable is not on the car rental agreement or hotel folio, an Acquirer may lose the compliance.



Estimate of the charges for damages

● A merchant must provide an estimate (clearly highlighted in English) which is dated before the disputed transaction and has been sent to the cardholder before the charge is processed.

● Providing an invoice from a garage which has already repaired the vehicle is insufficient

● Failure to provide a valid estimate would indicate that the cardholder has never been informed about the cost of the damages and has not had a chance to agree to them.


September 2011 53



Time frame for the cardholder to be advised of the delayed or amended charge

• Section 5.3.B.2.c of the VEOR Vol I states “the cardholder must be informed about the delayed or amended charge within 10 calendar days of the return date of the rented vehicle or check out from the hotel”.

• In addition, the car rental company must wait 20 business days from the date of the confirmation letter provided to the cardholder for a response, before processing a delayed or amended charge for damages.

Chargeback Reduction Service Return


54 September 2011


Chargeback Reduction Service Return - Best practice

Section 7.10.A.1 - V.E.O.R., Volume I.

The following items are applicable to CRS returns:

• The requesting member must prove that the initial Chargeback conditions have been met.

• The chargeback must have been returned by Visa systems



The requesting member must prove that the initial Chargeback conditions have been met.

This must include any supporting documentation

• The disputed transaction receipt and proof that the transaction received authorization must be provided.

• Proof of a valid authorisation may be provided as either a VROL Transaction Inquiry (TI) log


September 2011 55



The chargeback must have been returned by Visa systems

• In order to file a Compliance under this section, evidence of the return must be provided.

• The reject must be coming from Visa. Internal edits preventing the Chargeback to be submitted are not valid for use with this section.

• When unsure if the Chargeback has been returned, please [email protected] to obtain the required details.

• These details must be attached to the Pre-Compliance case.

Credit transaction receipt


56 September 2011


Credit Transaction Receipt - Best practices

• Section 5.3.D.2 - the V.E.O.R., Volume I.

• Definition – “A merchant may prepare a Credit Transaction Receipt when a validTransaction Receipt was previously processed.”

• An Issuer may utilise this right if a credit was applied to a Visa card with no previous debit and the cardholder is unwilling to return the funds, causing a financial loss (“Run-away spender”)


Credit Transaction Receipt - Best practices

• The filing member is required to provide proof of both the credit (TC06) and the debit (TC05)

• An Issuer must also evidence its financial loss by providing proof that the cardholder withdrew the funds.

• For example, to evidence this; an Issuer may choose to provide a copy of the cardholders statement.


September 2011 57


Other Examples of Dispute Reasons for Compliance

● Split Transaction – Section 3.4.A.4 Volume II - VEOR

● Unauthorised Signature – Section 3.4.A.3 Volume II - VEOR

● ECI 6 transaction – Section 3.4.C Volume II - VEOR

● Hotel Reservation Service – Section 3.4.A.2 Volume II - VEOR


Further Information

● As a reference and guidance on how to handle disputes, you may also look at the Visa Europe Dispute Resolution FAQ’s & Case Studies available as the following address:

Visa Online => Start => Customer Services = > Visa Resolve Online => FAQ’s


58 September 2011

Dispute Resolution Forum Minutes

Introduction

Michelle Harvey (MH) opened with an introduction and walk through the agenda for the day.

Trends

Juan Gonzalez (JG) opened the day with presentation on volumes and trends over the last two years. JG highlighted the top five chargebacks and asked why there was such a low representment ratio on RC83. JG verified one of the reasons was due to Acquirers not going to their merchants and requesting details.

Action: Dispute Resolution - Best Practice document.

JG mentioned that it is the first time that RC72 has appeared in the top five reason codes chargebacks due to the introduction of a new condition where incorrect details were put in the auth request.

Case volumes are falling but the values are increasing.

JG advised that the Visa Europe Committee provides a rule on any case where a Visa Europe Member is involved. Visa Europe has regular meetings with Visa Inc to ensure all rulings are consistent.

It is the first time that RC85 has appeared in the top five reason codes for filing due to the introduction of a new condition.

JG asked why members think that Issuers are wining more cases – answer given possibly due to liability shift.

JG highlighted that the Committee are working to maintain a good service level on closing cases; currently the average days to close cases is under 60 days, unlike in 2007-2008 where the average day was around 355 days.UAT Rule changes

Richard Waller (RW) presented rule changes to transactions at Cardholder Activated Terminals (CAT A, B and C). CAT A, B and C will no longer be the terminology; this will now only be referred to as Unattended Acceptance Terminals (UAT), this change comes into affect October 2011. RW advised members to refer to member letter VE 28/11.

RW highlighted that RC96 will no longer exist as these transactions are now monitored by floor limits and not an exceeded amount; however members will instead have chargeback right under RC72.


September 2011 59

Questions and Answers Question: Authorisation and clearing records sometimes differ, which data the

Committee will use for rulings. Answer: Authorisation should prevail, when dispute is about authorisation. Question: Electron cards transaction received without authorisation. [this isn’t a

question, what did they ask?] Answer: Should be authorised, if take it without getting authorisation then maybe in

violation of service code so Issuer maybe have chargeback right. If relates to a specific Acquirer, we can deal with later but Issuer will have a chargeback right. We cannot mandate the merchant.

Question: Will there be any change to RC81 with magnetic stripe telephone transactions. Answer: Chgbk right will still remain – only definition changes. Question: Clarification on if amount exceeds 40euro. Answer: If the amount is exceeded, if chip transaction can only chargeback difference,

if magnetic stripe chargeback is full amount.

Action: Dispute Resolution - Best Practice document

Contactless and Mobile

Mark Austin (MA) and Chris Jones (CJ) presented on Contactless and Visa Mobile.

MA highlighted that the Operating Regulations are still in final stage of development, however Contactless and Mobile is an area that is growing quite fast.

Short video on contactless was shared showing a real contactless card being used in different markets.

3000 new contactless points are being installed for the Olympics. Every bus in London (8000) will have contactless acceptance.

Faster for merchants, mobile payments will be key in the way payments are made in the future.

MA highlighted an interesting fact – Mobile: high growth is expected in the next few years. Stats show that there are more mobile phones in the world than toothbrushes!

There is an overwhelming consumer demand for contactless. There are consumer concerns over security but this lowers with usage. Visa Europe expects more take-up from large retailers over the next 12 months. Members advised to keep in contact with Visa Europe and Relationship Manager.

MA shared information about the new Visa Europe initiative, Visa Mobile P2P. This will allow cardholders to send money to another Visa Cardholder from their mobile phone.


60 September 2011

CJ advised on what was changing on contactless cards. These include:

To support mobile payments, contactless cards can pay for higher value items with online pin. From Merchant perspective this will widen what contactless can be used for. Consumer perspective makes it little bit easier.

Different markets could have different limits, European limit is 20 euros. For markets that set their own limits, merchants are aware that they are liable to anything over this amount e.g. Italy limit 25 euros so are liable for 5 euros.

CJ showed members a demonstration on the scheduled break, which was well received.

Contactless Dispute Resolution Rules

RW presented contactless dispute resolution rules, how they exist and future changes.

Higher value payments should be in place middle next year. Currently looking at dispute rights and limitations. Still defining rights but will be in member letter due in next six months.

Questions and Answers Question: What is rational of exclusion of DCC? Answer: Terminal cannot determine until after the amount that it is a foreign currency

card, so cannot offer DCC. Question: Can contactless be used for ATM transactions? Answer: Cannot be done as needs a PIN. Question: Variable fare amount will not be known until end of day, what happens if goes

for authorisation and Issuer declines? Answer: Merchant will have to try to resolve with cardholder directly. MA advised that,

if declined, may be allowed to submit transaction but put cardholder on deny list, so will not be able to use transit service/buses etc again. Complex rules, mostly will be known fare. Audit will be in place to ensure there is not a large number of declined trans.

Question: Variable fare puts merchant at risk at the end Answer: May be small amount, average fare amount is £1.40. Attractive to merchant

as do not have to use cash. Question: Is the passcode transmitted as part of validation? Answer: Terminal only knows if passcode is correct or not, validation will be ‘yes’

equals correct. Field will be in BASE I message to show yes or no response. Question: Is the merchant obliged to fulfil an authorisation?

Answer: Yes. Question: If cardholder only says they only made half the journeys and fares, what are

the rights? Answer: May be a dispute right, but would need proof that amount charged is different

to amount that it should be. It will be determined within next couple of months on how chargeback rights are applicable.


September 2011 61

CNP Fraud Trends and Current Threats

Robin Reichwald (RR) discussed current fraud trends. Fraud rate is lowest it has been.

Germany was slow in VBV and EMV which gave big increase in fraud rate. Worked with them to bring down these rates, which has been a good success.

Republic of Ireland was reducing fraud rates but is starting to go up again. Any increase is usually centred on unsecured e-commerce area, mostly around gambling industry.

Card not present vs. card present. Over half losses for Issuers are card not present and 22% counterfeit. This is where main focus is on reducing fraud. Large reduction is in counterfeit year on year, due to EMV migration in Visa Europe.

ATM is the largest fraud mainly on counterfeit and stolen, followed by cash advances. Cash advances are predominantly UK problem. Been working closely with UK members to control this within UK.

Card present fraud is decreasing; card not present is now main focus. More controls now on e-commerce which has meant increases in traditional mail order/telephone order transactions.

55% of card not present fraud is domestic. 32% is intra-regional, 87% is contained within Visa Europe. This means we should be able to have an impact on this fraud.

However, all figures are based on fraud reporting figures reported by our Members. Any new trends are based on the accuracy of this data. If not being reported accurately, then the way we work and assist members will not be the most beneficial. RR stressed the importance of correct fraud reporting.

RR discussed the different types of fraud attacks that are being seen.

Where we are going in terms of fraud – big fraud cases are now in the media e.g. data hacking. There is no one answer to fix problems. Most important is to know your customer. Ensure secure card data and cards transported securely. Adapt/flexibility in strategies as fraud trends develop. We have programmes to look at situations to help mitigate risks.

We have effective tools, always looking to develop and come up with new ways to resolve fraud losses. We will continue to work with members to bring down the fraud.

Verified by Visa Liability shift and Fraud Best Practices

JG advised that there are lots of requests from Acquirers for assistance where Issuer is using RC30 to avoid fraud chargeback for ECI 6 transaction. JG confirmed that Issuer should not chargeback under RC30 or RC90 to bypass rules for VBV fraud.

If evidence in case that transaction is fraud, e.g. TC40 reported, Acquirer can invalidate for this reason by evidencing this. Also encourage Acquirer to show that merchandise or service was provided to the customer.

JG advised that Visa is now analysing RC30 for cases relating to ECI 6 transactions and working with Acquirers to try to stop this. Also, Visa may consider as a final action, the implementation of a compliance programme to fine Members if a violation occurred.


62 September 2011

JG asked what are Acquirers seeing, is this impacting your workloads, are volumes becoming higher – answer volumes are getting higher or last couple of years.

JG advised if the Acquirer has evidence of TC40, this would remedy the chargeback.

If Members see abuse from Issuers, please contact Dispute Resolution with details.

VROL and Fraud Reporting

Ben Beer (BB) spoke about VROL and how to fraud report. VROL can be used to fraud report. BB talked through slides on how to do this. If use of the Wizard is minimising incorrect fraud reporting.

BB then spoke on the benefits of VROL and got a round of applause as he spoke about the multi match system. Members seemed to be unaware that this was already in place.

Questions were taken within the break.

London 2012 and Dispute Resolution.

Presentation given by Sandy Flakelar (SF) from Partnership Marketing on London 2012 and Visa. Apologises from Colin Blount.

Short video shown on Olympic Games to show emotion in the games.

Attention of the world will be on London. There will be one payment card, which is massive business opportunity. People will only be able to use a Visa card in the Olympic Games.

Olympics are one of the most valuable brands in the world and there is a real benefit in association.

SF spoke about Team 2012/Team Visa./innovations/promotions and how Visa works with Members.

He also spoke about the mascots and told of the stories behind them.

Preparing for 2012

Richard Alexander (GB Hockey Player) answered questions from RW on his experience of playing hockey and being part of Team 2012.

RW spoke about his experience on being a Volunteer for the Olympic Games.


RW spoke about what we expect to see in regards to Olympic tickets in Dispute Resolution. He advised that LOCOG can confirm which companies are unofficial sources and as best practise to check there before disputing.

RW talked about RC30/RC85 and RC53. These are guidance only and Issuers should check chargeback rights.


September 2011 63

DAY 2

Michelle Harvey gave overview of the agenda for the day

BB gave clarifications on multi-wizard from the previous day, confirming it came into use from April 11 but not for Bulk Members

Compliance – Best Practice.

BB gave presentation on compliance.

Questions and Answers Question: Is it new that Issuer cannot go directly for compliance? Answer: Pre-compliance must be raised before compliance. Question: Can stats be provided on success rate when using date of discovery over

violation date? Answer: No.

MH advised that must evidence date of discovery. We will look to put together best practice guide on what can be used as date of discovery if this would be useful.

Reminder given that cardholder letter does not need to be signed for pre-compliances unless fraud.

Delayed/Amended Charges.

BB spoke about delayed or amended transactions.

Questions and Answers Question: Does the rental agreement have to specify Visa Card? Answer: If damages yes, if other rental charges then can state credit card. Question: Customer returns car damaged and then returns home. Merchant has to send

letter about delayed charge, does cardholder have to acknowledge the letter before merchant can process charge?

Answer: No. Question: Failure to provide a valid estimate would indicate that the cardholder has

never been informed about the cost of the damages and has not had a chance to agree to them, does this mean that cardholder has to agree to them?. What if they refuse as can get a cheaper quote?

Answer: Merchant has to get money via other means. Question: Parking fees. Can car rental merchant send own violation report or must it be

official notification? Answer: Must send the official notification.


64 September 2011

CRS Compliance

BB spoke about chargeback reduction service return.

Questions and Answers Question: Why do we still have to make a chargeback when we know that it will be

rejected? Answer: It is not known for sure that it will be rejected and this compliance only applies

if the chargeback is returned. Question: All the transaction data is seen if a transaction inquiry is made so it’s easier for

an Issuer to do a pre-compliance. Actioning a chargeback first takes time and costs.

Answer: The chargeback could be correctly rejected, the violation only occurs when chargeback is rejected. Issuers could also be looking at the wrong compliance, may have chargeback right or difference compliance.

Question: If there is a chargeback right does this have to be used first. Answer: Yes, a chargeback must be actioned if there is a right.

Credit Transaction Receipt Compliance

BB spoke about best practices for credit transaction receipt compliance.

Breakout Sessions

Members were split into groups to attend the three different breakout sessions.

Forum Close

MH closed the forum and thanked members for their attendance and input.

Dispute Resolution Forum - Presentation

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Transcript of Dispute Resolution Forum - Presentation