April 8, 2020
In response to the global pandemic situation, Visa implemented a COVID-19 Issuer Dispute Monitoring Program effective April 1. Visa is taking measures to help maintain the integrity of the dispute process by reducing invalid disputes initiated into the system.
Based on the current crisis, Visa is modifying its programs to reduce the burden on its clients and merchants directly impacted by the pandemic.
The COVID-19 Issuer Dispute Monitoring Program primarily arises from challenges faced by the travel and entertainment industry. This sector is experiencing a surge in chargebacks from government closures, as well as cancellations of events, plane tickets, hotel reservations, etc.
Note that Visa has not changed its dispute rules in response to this event. Rather, they are working to reduce dispute volumes and eliminating or preventing invalid disputes in the system with this new program.
Visa operates a series of compliance programs that are focused on minimizing the impact excessive dispute rates may have on the payments ecosystem. Given the current crisis environment, Visa is modifying the programs to ensure that there is less burden on Visa clients and merchants impacted by the pandemic.
Visa continues to maintain that cardholders should work directly with merchants to resolve an issue before a dispute is initiated. Further, they maintain that issuers and acquirers remain flexible in resolving disputes to minimize impacts to cardholders and merchants.
The following key points summarize the measures Visa is taking to support its clients with dispute processing:
- The program will monitor dispute volumes for Airlines, Entertainment, Lodging, Transportation, and Travel Services.
- Any issuer that submits more than 50 invalid disputes daily will be flagged by the program. A dispute for goods or services not received is considered invalid if (a) it lacks detailed explanation of the dispute reason, (b) the merchant is able to provide the service, or (c) the cardholder has not attempted to resolve the dispute with the merchant directly.
- Issuers flagged by the program will be required to reverse all invalid disputes within three business days.
- Failure to reverse invalid disputes and/or repeated flagging by this program will be viewed as non-compliance and could result in non-compliance assessments, and ultimately loss of access to filing Visa consumer disputes.
The following is a summary of the changes in Visa’s Excessive Disputes Programs during
To support merchants in the Travel & Entertainment (T&E) industry, Visa will suspend the Visa Dispute Monitoring Program (VDMP) and Visa Fraud Monitoring Program (VFMP) through the July compliance cycle. Risk will not be sending program identifications to acquirers for T&E merchants during this time period. In addition:
- The Visa Acquirer Monitoring Program will be suspended for disputes arising from T&E merchants through the July compliance cycle.
- Regional Risk teams are empowered to suspend and / or waive VDMP or VFMP fees for non-T&E merchants that can demonstrate they have been directly impacted by the pandemic.
Kount is prepared to assist businesses as they navigate these changes.