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Visa Europe

Dispute Resolution Forum

Presentation Material
Forum: September 2011

October 2011

VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Best Practice Guide

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: disputes@visa.com.
Provide your feedback: feedbackdisputes@visa.com

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Dispute Resolution Forum Presentation Guide
September 2011

ii

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

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Dispute Resolution Forum Presentation Guide
September 2011

iii

Dispute Resolution Statistics


VE Transactions vs. Chargebacks

% 0.045

0.041

0.039

0.04

0.039
0.033

0.035
0.034

0.03

0.031
0.033

0.028

0.027

0.030

0.025

0.025
0.024

0.023

0.02

0.022

201 0
201 1

0.01 5
0.01
0.005

ly

Ju

Ju

ne

M
ay

il
pr
A

M
ar
ch

ua
Fe

Ja

br

nu

ar
y

ry

Month
Visa Europe
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Presentation Identifier.1

Top 5 Chargebacks RC % vs. Representments


VE Issued Cards vs. VE and VI Acquirers

% 70.00

60.00

59.33

50.00

40.00
% RC vs total Chbks
30.00

26.40

% Repr. Vs Chbks per RC

23.40
19.99
20.00
13.48

12.54
10.00

7.17

6.27

5.09 4.56

7.01
3.29

0.00
RC83

RC75

RC30

RC41

RC72

Other

RC

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Dispute Resolution Forum Presentation Guide
September 2011

Visa Europe Cases Filed


2010 - Arb Cases = 86.71% / Comp Cases = 13.29%
2011 - Arb Cases = 66.91% / Comp Cases = 33.09%
Vol 350

2010
289

300
250
200

2011

224
172

160
142
137
120

150
97

96

100

115

117

113

89

89

84

70

78

74
59

50

ec
D

ov
N

O
ct

pt
Se

ug

ly
Ju

ne
Ju

M
ay

pr
il
A

b
M
ar
ch

Fe

Ja

Month
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Visa Inc Cases Filed


2010 - Arb Cases = 89.73 % / Comp Cases = 10.27 %
2011 - Arb Cases = 89.05 % / Comp Cases = 10.94 %
Vol 400
2010

354
350

2011

310
300
250

251
230

246

262
237

232
212

204

196

200

247

230

189

150
100
50
0
Jan

Feb

Mar

Apr

May

Jun

Jul

Month
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September 2011

Visa Europe Filed Case Amounts

Vol 450

387

400

375

350

314
300

241

250

240

2010
182

200

2011

173

170

150
100

66

40

50
0
0 - 249

250 - 499

500 - 999

1000 - 4999

5000+

Euro

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Visa Inc Filed Case Amounts

Vol 1200
1000

985 1007

800
2010
600

478 504

400

525
428

2011

481

381

200

104

71

0
0 - 249

250- 499

500. - 999

1000 - 4999

5000

USD

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Dispute Resolution Forum Presentation Guide
September 2011

Visa Europe Top 5 Reason Codes Filed


Win/Loss Ratio

Issuer Wins

Vol
%

Acquirer Wins

80
70

73
69
65

Issuer Wins

Vol
%
80

Acquirer Wins
74

74

70

64

59

60

60
50 50
50

50

53
47

50 50
41

40

36

35

40

31
27

30

30

20

20

10

10

26

26

RC83

RC30

RC81

RC62

RC75

RC30

RC83

RC81

2010

RC75

RC85

2011

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

Issuer Wins Acquirer Wins

90
79

75

78

80

65

79

75

78

76

73

70
58

60
50
40

Acquirer Wins

90

80
70

Issuer Wins

60
50

42

40

35

30

25

22

21

30

20

20

10

10

24

21

23

RC90

RC83

26

22

0
RC81

RC90

RC83

RC62

RC75

RC62

2010

Visa Europe Dispute Resolution Forum

RC81

RC75

2011

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September 2011

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

%
80

Issuer Wins Acquirer Wins


76

76
69

70

Issuer Wins

%
80

66

76

74

69

70

64

60
60

Acquirer Wins

60

50

55

50

44

40
40

34

31
30

40

24

35

30

24

31

26
22

20

20

10

10

0
RC83

RC30

RC85

RC75

RC81

RC83

RC30

RC85

2010

RC81

RC75

2011

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Visa Europe Average Days to Close Cases

Days 70

61

64

63

60

62

60
53

51

49

50

50

53

53

62

59

54
45

45

40
2010
30

2011

20
10
0
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Month

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Dispute Resolution Forum Presentation Guide
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.
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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

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September 2011

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.
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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

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Dispute Resolution Forum Presentation Guide
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.

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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
UATs that do not receive the required Authorization may be charged back.
However, for magnetic stripe initiated transactions at UATs with the following
MCCs, 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

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Dispute Resolution Forum Presentation Guide
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September 2011

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Dispute Resolution Forum Presentation Guide
September 2011

Mobile / Contactless and Dispute Resolution


Contactless and Mobile Acceptance Infrastructure
is growing rapidly

Over 130K
acceptance
points and
counting

3.3m Cards
20,000 Terminals
13 issuers

14m Cards
60,000 Terminals
6 issuers in 2011

Finland

Iceland

Sweden

Estonia
Latvia

Denmark

Ireland

240k Cards
2,000 Terminals
7 issuers

Netherlands
Poland
Belgium Germany
Luxembourg
Czech Rep
Slovakia
France
Switzerland

Consumer rollout
Portugal

Study phase

200k Cards
2,000 Terminals

Lithuania

UK

Pilot

Launching in
2011

Norway

Launched in
May 2011

AustriaHungary
Romania
Slovenia

Italy

Bulgaria

Spain

Mobile project
Launching in
Q2 2011
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100k Cards
1,000 Terminals
4 issuers

Turkey

Greece

2.4m Cards
45,000 Terminals
11 issuers

Cyprus
Israel
28
Presentation
Identifier.28

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The Opportunity

4.8 Billion
Mobile subscribers

1.3 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

2.5 Billion
TVs

2 Billion Visa
Cards

1.3 Billion
Internet Users

800 Million
PCs

130 Million
iPods

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

Source:

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

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September 2011

Our vision: Our consumers life is enriched by the


Visa Mobile experience
all available from any device and any operator
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

NFC

I can now shop online wherever I


am. It is easy and secure.
Mobile Web

Person to
Sending or
person receiving money has
never been that fast
and easy.

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 servicesall delivered by someone I trust!
Consumer

Alerts in real time


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
Balance enquiry
access my balance and track my spend
I am in control of my money as I can
quickly and easily wherever I am.
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.

+ New
+ New
and
and
unknown
unknown

including
including
service
service
enhancements
enhancements
due
due
to to
location
location
based
based
functionality
functionality
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Our vision: Our consumers life is enriched by the


Visa Mobile experience
Consumers will have an integrated range of
payments-related services
any device
any operator

Mobile contactless payments


Account balance always available
Electronic receipts
Location based services
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
+ New and unknown including service enhancements due to location based functionality
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September 2011

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Whats needed for mobile contactless


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

MMC

MMC With
NFC

Accessory or
micro SD
Secure element
embedded on the
Memory card
Secure element on the
handset
micro-SD card
with antenna
+ New and unknown including service enhancements due to location based functionality
Mobile Centric

SIM Centric
Secure element is
the SIM

Micro SD
Memory Card

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Contains both SE and


antenna

33
Presentation Identifier.33

Contactless Card High Value Payment


with online PIN

23.50

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

o Consumer enters PIN on the terminal

p Payment
is confirmed

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

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September 2011

Mobile Contactless High Value Payment


with passcode pre-entry preferred method

23.50

n Consumer presses
the Pay now button

o Consumer is prompted for his/her passcode to

p Consumer

q Payment is confirmed

authenticate, enters it and is asked to hold his/her phone to


the contactless symbol on the reader

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

and consumer can choose


to add information on the
transaction

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

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Mobile Contactless High Value Payment


with passcode entry

23.50

n Transaction is

o Consumer holds

initiated and consumer


is prompted to holds
his/her phone
to the contactless
symbol on the reader

his/her phone
to the contactless
symbol
on the reader

p Reader
directs
consumer to
his/her phone

q 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

23.50

r Consumer holds again


his/her phone
to the contactless symbol
on the reader

s Payment is confirmed and


consumer can choose to add
information on the transaction

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

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September 2011

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Bridging technologies

iCarte Accessory

Micro-SD cards with antennas

Exclusivity for Europe


Partnership 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

Exclusivity for Europe


Easy set-up and distribution based on
standard card production processes
micro-SD card makes any phone with a
memory card slot contactless-enabled
Pilots to begin end Q3 10; VI type approval in
progress

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

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Commercialisation: where we are


Today

Global trials
indicate
overwhelming
consumer
demand
Security still a
concern but
wanes with habit
and usage

Today

Consumer
behaviour
and needs
Fulfils a genuine
need

Standards and
regulation

Simple, easy to
use for mass
market

Reliable
technology

Deployment of
contactless
acceptance
infrastructure key
Launch of card
programmes to drive
usage, habit and
pave way for mobile

Technology
and
standards

Supply of mobile
phones that
consumers want

Ease of set up

Value for money


for the customer

Testing, approvals
and certification

Ecosystem distributes
value sustainably
Incumbents motivated by
new value

Unlikely to find a one


size fits all business
model for all markets

Some models exist but


agreements still not
including service enhancements due to location based functionality
finalised
Commercial
viability

+ New and unknown

Today
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September 2011

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 years
2.1.1 terminals enable payment with mobile devices where a cardholders passcode can
be entered to authenticate a high-value payment
Passcode ensures global interoperability and cannot be supported on 2.0.2 terminals
Visa 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 2014
All installed and activated contactless terminals must support the VCPS
specification version 2.1.1 (or later) from 1 January 2014
+ New and unknown including service enhancements due to location based functionality

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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 years
2.1.1 terminals enable payment with mobile devices where a cardholders passcode can
be entered to authenticate a high-value payment
Passcode ensures global interoperability and cannot be supported on 2.0.2 terminals
Visa 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 2014
All installed and activated contactless terminals must support the VCPS
specification version 2.1.1 (or later) from 1 January 2014
+ New and unknown including service enhancements due to location based functionality

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September 2011

15

Contactless CVM-required limits


Visa Europe is enabling higher-value contactless transactions with CVM
Visa Europe-issued contactless cards can only support online-PIN as the CVM for
contactless transactions
Visa Europe-issued Mobile payment cards must support Consumer Device CVM and
may 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 35
This limit applies to all contactless transactions undertaken in the market
Domestic issuers and acquirers agree liability for domestic transactions
Acquirers accept liability on the full amount for any non-domestic card contactless noCVM transactions above 20
Mature 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+ New
to be
as CVM
byservice
the card
or mobile
andused
unknown
including
enhancements
due to device
location based functionality
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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 cards
Guarantees 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 cards
Will not work on Visa Transit Solutions Known Fare implementations e.g. TFL
Buses
Can work on Visa Transit Solutions Known Fare implementations e.g. TFL
Tube if ODA performed only possible for cards on VCPS 2.1

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

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September 2011

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

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Contactless Low value Transactions

Contactless transactions which are below the CVM threshold can be disputed as
follows:
Description of Chargeback

Reason
Code

Time Limit

Services not Provided or Merchandise not received

30

120

Not as Described or Defective Merchandise

53

120

Declined Authorisation

71

75

No Authorisation

72

75

Late Presentment

74

120

Duplicate Processing

82

120

Credit not Processed

85

120

Visa Europe Dispute Resolution Forum

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Presentation Identifier.45

VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
September 2011

17

Contactless Low value Transactions

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.

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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)

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VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
18

September 2011

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.

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Presentation Identifier.48

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.

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VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
September 2011

19

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.
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VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
20

September 2011

Fraud Trends
Visa Europe - Issuing: Fraud to Sales Rate
0.50%
0.45%

UK

0.40%
France

0.35%
0.30%

Germany

0.25%
0.20%

Sw eden

0.15%
Republic of
Ireland

0.10%
0.05%

Visa Europe

0.00%

1
Q

4
Q

3
Q

2
Q

1
Q

11
20

10
20

10
20

10
20

10
20

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Presentation Identifier.55

Visa Europe - Acquiring: Fraud to Sales Rate


0.30%
UK

0.25%
France

0.20%
Germany

0.15%
Sw eden

0.10%
Republic of
Ireland

0.05%

Visa Europe

0.00%
11
20

10
20

10
20

10
20

10
20

Visa Europe
Member use only
Information
Classification
as Needed

1
Q

4
Q

3
Q

2
Q

1
Q
Visa Europe Dispute Resolution Forum

56
Presentation Identifier.56

VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
September 2011

21

Top 30 Issuers

31%
All other issuers

69%
Top 30 issuers

The top 30 issuer represent 70% of


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

Year ending March 2010 top 30 issuers =


542 million Euro

Our target: 40 million Euro Reduction


Our target: 40 Million Euro Reduction

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Presentation Identifier.57

Visa Europe Issuing: Largest Fraud Drivers:


Year Ending March 2011

CardNot
notPresent
present
Card
352m
- 54%
of total
fraud
60%
of total
fraud

Counterfeit Cards
Counterfeit cards
19% of total fraud
146m - 22% of total fraud

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Dispute Resolution Forum Presentation Guide
22

September 2011

Visa Europe - Issuing: Split of Fraud by Fraud


Type
200,000,000
FRD APPL

180,000,000
160,000,000

MISC

140,000,000
NRI

120,000,000
STOLEN

100,000,000
80,000,000

LOST

60,000,000
CNTRFEIT

40,000,000
20,000,000

ACCT USE

11
20

10
20

10
20

10
20

10
20

1
Q

4
Q

3
Q

2
Q

1
Q

Visa Europe
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59
Presentation Identifier.59

Visa Europe - Issuing: Top 10 MCCs by Fraud


Type for Quarter Ending March 2011
20,000,000

STOLEN

18,000,000
NRI

16,000,000
14,000,000

MISC

12,000,000
LOST

10,000,000
8,000,000

FRD APPL

6,000,000
CNTRFEIT

4,000,000
2,000,000

ACCT USE

0
C
M
O
B
N
IO
AT
C
A
C
VI

EF

IL

S
ET

A
ET

-D

RK

Visa Europe
Member use only
Information
Classification
as Needed

&

ES

S
CE

E
IS

I
RV

SE

G
LO

ES

ES

TA

SE

R
O
ST

R
O

S
IE

ST

AL

N
O

EN

IC

C
E
UP

AN

H
AS

O
TT
O
/L
O

N
SI

/S

O
TI

/C

S
RE

IC

CK

EN
G

SI

TM

N
O

IN

AR

S
FE
O

EP

TR

UN

O
ST

ER

VE

C
O

PR

EC
EL

TR

R
G

O
EC
A

TO

C
ER

U
/A
ST

/M
ST

IN

IN

R
/T

AL
CI

AL
CI

NG
TI
ET

L
TE

NA
FI

NA
FI
Visa Europe Dispute Resolution Forum

60
Presentation Identifier.60

VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
September 2011

23

8 Strangest Fraud MCCs

Health&&Beauty
Beauty
Health
447k
281k

Opticians
780k

Wigs & Toupees


92k

Veterinary Services
97k

Dentists
443k

Fines
670k

Child Care Services


15k

Bowling Alleys
13k

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61
Presentation Identifier.61

VE Issued Card Present vs Card Not Present


Fraud
100
Millions
Euros

90
80
70
60
50
40
30
20
10
0
2010 Q1

2010 Q2

2010 Q3
2010 Q4
2011 Q1

Card Present
Visa Europe Dispute Resolution Forum

Card not Present

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VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
24

September 2011

Visa Europe Issuing CNP Fraud by ECI (% of


Total)
45%

42%

41%

Percent of Total Fraud

40%
35%
29%

30%
25%

23%

20%

16%

15%
10%

13%

12%

12%

7%

6%

5%
0%
Q1 2010

Q1 2011

MOTO ECI 1-4


Merchant Attempted VbV ECI 6
Not Defined
Visa Europe Dispute Resolution Forum

Fully Authenticated VbV ECI 5


Unsecure E-Com ECI 7-9

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Presentation Identifier.63

Cross Border vs Domestic CNP Fraud:


Visa Europe Issuing Year Ending March 2011

Vs

55% - 193m
Domestic
Visa Europe Dispute Resolution Forum

32% - 115m
Intra
Regional

13% - 45m
Inter
Regional

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VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
September 2011

25

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
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65
Presentation Identifier.65

Bank A - Issuing: Top 10 MCCs by Fraud Type:


Quarter Ending March 2011
500,000
450,000
400,000
350,000
300,000
COUNTERFEIT

250,000
200,000
150,000
100,000
50,000
0
M

ST

ES
A

O
ST

S
IE

S
RE

LY

S
ET

EN

RK

PP
SU

M
IP

O
TT
O
/L
O

RM

AM

EA
W

N
SI

U
EQ

Visa Europe
Member use only
Information
Classification
as Needed

TO

/C

CK

A
RE

R
O

A
PH

ES

O
TI

EN

&

S
RE

IC

R
O
ST

E
UP

ES

/S

R
O

S
RE

ST

ES

SE

R
/T

UN

O
ST

EN

IC

O
ST

R
O
ST

S
EN

E
O

NG
TI
ET

RU

O
W

SH

D
AM

NT

TM

U
O

EO

C
IS

D
VI

AR

O
EC

EP

N
O

ER

TR

C
O

L
TE

EC
EL

R
G

Visa Europe Dispute Resolution Forum

66
Presentation Identifier.66

VISA EUROPE CONFIDENTIAL INFORMATION - Member Use Only


Dispute Resolution Forum Presentation Guide
26

September 2011

Country A - Issuing: Split of Fraud by Fraud Type


1,800,000
STOLEN

1,600,000
NRI

1,400,000
1,200,000

MISC

1,000,000
LOST

800,000
FRD APPL

600,000

CNTRFEIT

400,000
200,000

ACCT USE

11
20

10
20

10
20

10
20

10
20

09
20

09
20

09
20

1
Q

4
Q

3
Q

2
Q

1
Q

4
Q

3
Q

2
Q

Visa Europe
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Presentation Identifier.67

Bank B - Issuing: Top 10 MCCs by Fraud Type:


Quarter Ending March 2011
100,000

STOLEN

90,000
NRI

80,000
70,000

MISC

60,000
LOST

50,000
40,000

FRD APPL

30,000
CNTRFEIT

20,000
10,000

ACCT USE

0
D
EP
AR
SE
C
VI

EF

RK

S
RE

-D

O
ST

ES

E
UP

ES

AN

R
O
ST

AL

N
O

/S

A
W
FT
SO

C
ER

EN

SI

R
TE

TM

PU

S
FE
O

M
O

S
ER

H
AS

O
TT
O
/L
O

T
KE

N
SI

S
RE

S
IE

ES

TO

R
O

/C

CK

O
ST

EC

EN
G

IR

ST

U
/A
ST

IN

IC

R
/T

G
O
AL
AT

PR

ER

VE

C
O

R
G

TR

NG
TI
ET

N
O

AL
CI

TR

ER
TH
O

EC
EL

NA
FI

S
ET

Visa Europe Dispute Resolution Forum

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September 2011

27

Bank B - Issuing: Split of Fraud by Fraud Type


3,500,000
STOLEN

3,000,000
NRI

2,500,000
MISC

2,000,000
LOST

1,500,000
FRD APPL

1,000,000
CNTRFEIT

500,000
ACCT USE

1
Q

4
Q

3
Q

2
Q

1
Q

4
Q

3
Q

2
Q

Visa Europe
Member use only
Information
Classification
as Needed

11
20

10
20

10
20

10
20

10
20

09
20

09
20

09
20
Visa Europe Dispute Resolution Forum

69
Presentation Identifier.69

Recent Fraud Attacks

Methods of Attack:
ATM skimming, card & cash trapping
Unattended terminals
Ghost terminals
Refund fraud

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28

September 2011

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)

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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

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September 2011

29

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

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73
Presentation Identifier.73

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

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September 2011

Evolving Risks
The Threat is a constant we have to live with

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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

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September 2011

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And Yet More Of The Same

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Fraud Solutions

There is no single solution, its 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

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32

September 2011

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

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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

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September 2011

33

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

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September 2011

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

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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)

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September 2011

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VBV liability shift RC 30 and ECI 5 and 6

Acquirer Action
Acquirers can attempt to invalidate at Representment by evidencing
Transactions were asserted to be fraudulent by the cardholder
Transaction has been fraud reported (TC40).
Acquirers should also provide documentation (whenever possible) to prove that
the Cardholder received the purchased services/merchandise.

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VBV liability shift RC 30 and ECI 5 and 6


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.

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September 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).

Visa Europe
Tesco
2011 Dispute Resolution Forum

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September 2011

37

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

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Presentation Identifier.89

The Fraud Reporting Wizard


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

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September 2011

The Fraud Reporting Wizard


Select Guide Me to open the Fraud Reporting Wizard

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The Fraud Reporting Wizard


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

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September 2011

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The Fraud Reporting Wizard


The Fraud Type is included in the questionnaire.

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The Past

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The Past

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The Present

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The Future

is to further improve our Dispute Resolution system.


Constant improvements
Acknowledge new technologies and processes
Easier handling of Dispute Resolution cases.

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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.

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September 2011

Current improvements
The extensive data available in Visa Transaction Research Service (VTRS) will
gradually be integrated into the VROLs 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.

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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.

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The Good Faith Resolution Report (ROL-175)

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September 2011

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.

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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.

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London 2012 Cardholders 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:
london2012service@shop.london2012.com 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

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London 2012 Olympic Tickets

Services not rendered - Reason code 30


The Reason Code 30 chargeback right covers several situations including nonreceipt 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

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September 2011

London 2012 Olympic Tickets

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 cardholders 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.

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Compliance Best Practices


What is compliance?
Operating
Regulation is broken

Financial loss

No Chargeback rights

Compliance case
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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.

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September 2011

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.

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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.

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Compliance Best practice

A member is required to:


Cite the rule violation within the precompliance 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)

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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)

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September 2011

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

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Delayed or Amended Charges - Best practice

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

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Delayed or Amended Charges - Best practice

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.

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Delayed or Amended Charges - Best practice

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.

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Chargeback Reduction
Service Return

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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

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Chargeback Reduction Service Return


- Best practice
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

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September 2011

Chargeback Reduction Service Return


- Best practice
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 contact
customersupport@visa.com to obtain the required details.
These details must be attached to the Pre-Compliance case.

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Credit transaction receipt

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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 valid
Transaction 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)

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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.

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September 2011

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

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Further Information
As a reference and guidance on how to handle disputes, you may also look at
the Visa Europe Dispute Resolution FAQs & Case Studies available as the
following address:
Visa Online => Start => Customer Services = > Visa Resolve Online => FAQs

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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.

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Questions and Answers


Question:
Answer:
Question:
Answer:

Authorisation and clearing records sometimes differ, which data the


Committee will use for rulings.
Authorisation should prevail, when dispute is about authorisation.
Electron cards transaction received without authorisation. [this isnt a
question, what did they ask?]
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:
Answer:

Will there be any change to RC81 with magnetic stripe telephone transactions.
Chgbk right will still remain only definition changes.

Question:
Answer:

Clarification on if amount exceeds 40euro.


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.

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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:
Answer:

What is rational of exclusion of DCC?


Terminal cannot determine until after the amount that it is a foreign currency
card, so cannot offer DCC.

Question:
Answer:

Can contactless be used for ATM transactions?


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?
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.

Answer:

Question:
Answer:

Variable fare puts merchant at risk at the end


May be small amount, average fare amount is 1.40. Attractive to merchant
as do not have to use cash.

Question:
Answer:

Is the passcode transmitted as part of validation?


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?
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.

Answer:

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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 ecommerce 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.
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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.

London 2012 Olympic Tickets


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.

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September 2011

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:
Answer:

Is it new that Issuer cannot go directly for compliance?


Pre-compliance must be raised before compliance.

Question:

Can stats be provided on success rate when using date of discovery over
violation date?
No.

Answer:

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:
Answer:

Does the rental agreement have to specify Visa Card?


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?
No.

Answer:
Question:

Answer:
Question:
Answer:

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?
Merchant has to get money via other means.
Parking fees. Can car rental merchant send own violation report or must it be
official notification?
Must send the official notification.

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CRS Compliance
BB spoke about chargeback reduction service return.

Questions and Answers


Question:
Answer:

Question:

Answer:

Question:
Answer:

Why do we still have to make a chargeback when we know that it will be


rejected?
It is not known for sure that it will be rejected and this compliance only applies
if the chargeback is returned.
All the transaction data is seen if a transaction inquiry is made so its easier for
an Issuer to do a pre-compliance. Actioning a chargeback first takes time and
costs.
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.
If there is a chargeback right does this have to be used first.
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.

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Dispute Resolution Forum Presentation Guide
64

September 2011