Visa Claims Resolution (VCR)

Summary of Changes

In April 2018, changes to the Visa dispute process went into effect. Here's what you needs to know about Visa Claims Resolution (VCR):

  • Visa Claims Resolution (VCR) is Visa’s new dispute (chargeback) program that aims to address the rising number of disputes and an increase in related processing time and costs
  • VCR is designed to migrate from a litigation-based model to a liability assignment model that leverages existing data to simplify the processing of disputed transactions and speed up the end-to-end cycle time for resolution.

VCR has the following impacts on the disputes process:

  • Visa changed some of the terminology related to dispute resolution.
  • Visa has created four new dispute reason categories: 10 - Fraud, 11 - Authorization, 12 - Processing Errors, and 13 - Consumer Disputes.
  • These four categories are split into two distinct resolution paths: Allocation (10 and 11) and Collaboration (12 and 13).
  • Visa now has 25 reason codes that fall within the four categories. Reason codes are longer, up to 6 characters, and include decimal points. Web reports and delimited file reports now reflect the new reason codes. New dispute categories appear on your reports.
  • Visa has shortened the end-to-end cycle for dispute resolution. You will have to respond by day 18 for Allocation disputes and by day 24 for Collaboration disputes.
  • No provisional credits given for Allocation disputes when challenging a dispute.
  • The Online Chargeback Management system now reflects the new reason codes and case statuses.
  • Visa is now blocking invalid disputes through a new set of business rules.

Technical information, and what you may experience because of the changes, appears in the Frequently Asked Questions below. We update the information as we learn more.

Frequently Asked Questions

What is Visa Claims Resolution (VCR)?

Visa Claims Resolution (VCR) is Visa’s new dispute (chargeback) program.

 

Why is Visa changing its dispute process?

The VCR program is a response to the rising number of disputes and an increase in related processing time and costs. The VCR initiative is designed to migrate from a litigation-based model to a liability assignment model that leverages existing data to simplify the processing of disputed transactions and speed up the end-to-end cycle time for resolving disputed transactions.

What are the changes to Visa’s dispute process?

  • Visa is changing some of the terminology related to dispute resolution.
  • Visa has created to new high-level dispute reason categories, Allocation and Collaboration.
  • Visa has 25 new reason codes
  • Visa has shortened the end-to-end cycle for dispute resolution by reducing the amount time to challenge a dispute and to respond to a challenge.
  • No provisional credits given for Allocation disputes when challenging a dispute.

 

Who is impacted by VCR?

All merchants, acquirers and issuers worldwide are impacted by the VCR program.

 

When was VCR effective?

VCR launched on April 13, 2018.

 

What is the Allocation process?

Allocation disputes relate to fraud and authorization issues. Visa allocates the financial liability to the merchant and acquirer, thus the name, “Allocation.” Visa anticipates a majority of the disputes will follow the Allocation process. As of July 2018, approximately 85% of disputes were in the Allocation path.

 

What is the Collaboration process?

Collaboration disputes relate to processing errors and consumer disputes (other than fraud). Visa expects the merchant and acquirer to collaborate and share relevant transaction information with the issuer to determine assignment of financial liability for the dispute. Visa expects a smaller portion of the overall disputes to follow the Collaboration path. As of July 2018, approximately 15% of disputes were in the Collaboration path.

 

Should I expect my volume of disputes to change?

Yes, you should expect to see fewer disputes. A new set of business rules evaluate Disputes to determine if the dispute is valid. Invalid disputes returned to the issuer; require no further action required by the merchant. As of July 2018, Chase Merchant Services has seen a reduction in dispute volume ranging from 7-10%.

 

What are the terminology changes related to Visa’s new dispute resolution program?

The chart below illustrates the changes made to Visa terminology.

Current Defined Term New Defined Term
Chargeback Dispute
Representment Dispute Response/Pre-Arbitraton
Chargeback Reversal Dispute Reversal
Representment Rev/Adjustment Dispute Response Reversal

 

How does VCR impact the dispute reason codes?

In addition to Reason Codes changing as a result of the VCR program, each Reason Code is now associated with a new Reason Category. The length and structure of Reason Codes changed from a current two-digit code to four to six digits that contains decimal(s) point(s). VCR charts (Charts 1 and 2) map the old Reason Code to its new Reason Code.

Chart 1: Allocation Reason Code Mappings:

Allocation

Fraud Reason Codes
Current Reason Code New VCR Reason Code
62(2) 10.1 EMV Liability Shift Counterfeit Fraud
81(3) 10.2 Other Fraud – Card Present Environment
81(1) 10.3 Other Fraud – Card Present Environment
83(1) 10.4 Other Fraud – Card Absent Environment
93(1) 10.5 Visa Fraud Monitoring Program
Authorization Reason Codes
Current Reason Code New VCR Reason Code
70(1) 11.1 Card Recovery Bulletin
71(1) 11.2 Declined Authorization
72(1) 11.3 No Authorization
78(1) 11.3 No Authorization

Chart 2: Collaboration Reason Code Mappings:

Collaboration

Processing Error Reason Codes
Current Reason Code New VCR Reason Code
74(1) 12.1 Late Presentment
74(2) 12.1 Late Presentment
76(1) 12.2 Incorrect Transaction Code
76(6) 12.2 Incorrect Transaction Code
76(2) 12.3 Incorrect Currency
76(4) 12.3 Incorrect Currency
76(5) 12.3 Incorrect Currency
77(1) 12.4 Incorrect Account Number
77(2) 12.4 Incorrect Account Number
80(3) 12.4 Incorrect Account Number
81(2) 12.4 Incorrect Account Number
83(2) 12.4 Incorrect Account Number
80(1) 12.5 Incorrect Amount
80(2) 12.5 Incorrect Amount
82(1) 12.6 Duplicate Processing
86(1) 12.6 Duplicate Processing
72(2) 12.7 Invalid Data
Consumer Disputes Reason Codes
Current Reason Code New VCR Reason Code
30(1) 13.1 Merchandise/Services Not Received
41(1) 13.2 Cancelled Recurring Transaction
41(2) 13.2 Cancelled Recurring Transaction
53(1) 13.3 - Not as Described or Defective Merchandise/Services
53(2) 13.3 Not as Described or Defective Merchandise/Services
53(3) 13.3 Not as Described or Defective Merchandise/Services
53(4) 13.3 Not as Described or Defective Merchandise/Services
53(5) 13.4 Counterfeit Merchandise
53(6) 13.5 Misrepresentation
85(1) 13.6 Credit Not Processed
85(2) 13.7 Cancelled Merchandise/Services
85(3) 13.8 Original Credit Transaction Not Accepted
90(1) 13.9 Non-receipt of Cash or Load Transaction Value

 

Are there any changes to how I challenge a dispute under the new VCR program?

No provisional credits given for Allocation disputes when challenging a dispute. The process remains the same for Collaboration disputes. Provisional credits given when challenging a Collaboration dispute.

 

If I challenge a dispute, do I still get provisional credit for the amount of the dispute?

No provisional credits given for Allocation disputes when challenging a dispute. The process remains the same for Collaboration disputes. Provisional credits given when challenging a Collaboration dispute.

 

Have my reports changed as a result of VCR?

Because of the changes to the Reason Codes and dispute processing paths, some of your merchant reports have changed. Web reports that currently contain dispute Reason Codes will reflect the new Reason Codes and new dispute categories.

Impacted Web reports include:

PTO Users

  • PDE-0017 – Chargeback Activity
  • PDE-0020 – Chargebacks Received
  • PDE-0039 – Chargebacks Won/Lost

ROL Users

  • Exception Summary Report
  • Pending Chargeback
  • Denied Reversal
  • Reversal

PTO Users

  • PDE-0017 – Chargeback Activity
  • PDE-0020 – Chargebacks Received

ROL Users

  • Combined Extract
  • Chargeback File

 

Is there a detailed flow for the new dispute process paths?

VCR shortened the timeframe to challenge a dispute to 30 days.

For Collaboration disputes, the path is similar to the previous process, except for the shortened timeframe.

For Allocation disputes, the VCR program changes the dispute process significantly.

  • To challenge a dispute, you initiate an outgoing pre-arbitration instead of representment.
  • Merchants no longer receive Provisional credit for challenged disputes with an outgoing pre-arbitration issued.
  • For Allocation disputes that have been “Auto-Returned to Merchant”, Chase will auto-accept the dispute on behalf of the merchant on day 19 if Chase has not received a response from the merchant by the end of day 18.
  • For Allocation disputes, other than those that are “Auto-Returned to Merchant”, a response to challenge the dispute is needed by the end of day 24.

 

Allocation Process Flow

VCR changed the day a response is required to challenge the Collaboration dispute to end of day 24.

The process flow for a Collaboration dispute is the same as it is today, with the only exception being the terminology change for a representment. VCR issues “Dispute response” instead of a “representment”.

 

When do I have to respond to a dispute?

For Collaboration disputes, you must respond to the dispute by day 24 if you intend to challenge the dispute. For Allocation disputes, you must respond by day 18, if you intend to challenge the dispute. The “respond by date” will reflect the timelines above.

Dispute Respond by Day

  • The process to challenge a dispute within the Online Chargeback Management System remains the same:
    • Continue to challenge the dispute using “Available Actions” in the Online Chargeback Management System, level 2, dispute detail screen
    • Continue to provide the sufficient compelling evidence
  • The new Visa reason codes are now visible in the level 2, dispute detail screen
  • Case statuses are reflecting the following new Allocation case statuses:
    • OPA_REQPND – Case status when Chase initiates a pre-arbitration
    • OPA_REQACC – Case status when Issuer accepts a pre-arbitration
    • OPA_REQDEN – Case status when the Issuer denies a pre-arbitration

Online Chargeback Management, Dispute List Page

Online Chargeback Management, Dispute Detail Screen

 

If I do not use Online Chargeback Management System what has changed with my dispute notifications?

  • Mailing and faxes are reflected the new Reason Codes.
  • Mailings and faxes reflect the shortened dispute cycle and inform clients of “respond by date”.

 

Are there new dispute fees due to VCR?

There are not any changes to fees assessed related to dispute management. Other acquirers may charge additional fees for challenging or accepting disputes beyond day 20, but Chase Merchant Services absorbs the fees.

 

If past Visa Reason Code 75 was not mapped to a new Reason Code, what happens to the dispute volume associated with Reason Code 75?

Reason Code 98 still appears for Collaboration disputes. A “dispute response” challenges a dispute under the new process. If the issuer denies or rejects a dispute response, the issuer initiates a pre-arbitration (also referred to as a second chargeback). You will not see any issuer initiated pre-arbitration associated with an Allocation dispute.

 

What are the reason code 98 after VCR for Visa disputes?

Reason Code 98 still appears for Collaboration disputes. A “dispute response” challenges a dispute under the new process. If the issuer denies or rejects a dispute response, the issuer initiates a pre-arbitration (also referred to as a second chargeback). You will not see any issuer initiated pre-arbitration associated with an Allocation dispute.

 

 

For an Allocation dispute, the category code of “OPAACCEPT” will signify that you won the challenge and “OPADENY” will signify that the dispute was lost. For a Collaboration dispute, you will be able to tell that you lost the challenge because you will get a new dispute with a Reason Code of 98 and you will have to match the dispute with a Reason Code of 98 to the original dispute by matching the merchant order number.

 

What are the requirements for the ECI (E-Commerce Indicator)?

The ECI on the authorization must be present and match the ECI on the deposit. If the ECI is missing on the authorization or the deposit or does not match, you will not be able to challenge the dispute. Visa will put the dispute as Card Present fraud (10.3) instead of Card Absent fraud (10.4). You may not be able to determine if the ECI is missing or not, so the best way to highlight a potential problem is if you get 10.3 Reason Codes for card not-present transactions.

 

I receive the PDE-0017 and/or PDE-0020 DFR file. What is the most current version of the DFR Technical Specifications and where can I find it?

The current version of the DFR Technical Spec is version 6.6 and is located on Developer Center under the “Card Not Present” section and then the “Other Product and Services” area.

 

I received the Combined Extract and/or the Chargeback file. What is the most current version of the NAP Data File Technical Specifications and where can I find it?

The current version of the NAP Data File Technical Spec is version 1.3 and is located on Developer Center under the “Retail Host” section and then the “Tandem Retail Supplemental Guides” area.

 

Is there a file size limit for images that I send in for compelling evidence?

Yes. The maximum individual uncompressed file size is 10 MB for all file types.

 

Is there a maximum page size for images that I send in for compelling evidence?

Yes. The maximum page size is 8.64 inches x 14 inches (for TIFF and JPEG).

 

What images can I send in for compelling evidence?

We recommend that you use TIFF, JPEG or PDF files for best quality. All other file types may be lower quality and could result in a rejection. See the table below for a list of all documents types and how they are converted prior to us sending them to Visa.

Method File Type Chase conversion File size limit
Online Chargeback Management system JPEG No conversion 10 MB
PDF No conversion 10 MB
TIFF No conversion 10 MB
BMP TIFF 10 MB
DOCX TIFF 10 MB
GIF TIFF 10 MB
JPG JPEG 10 MB
PNG TIFF 10 MB
TIF TIFF 10 MB
TXT TIFF 10 MB
XLS TIFF 10 MB
Multiple Documents Upload TIFF No conversion 10 MB
Fax n/a TIFF 10 MB
Mail n/a TIFF 10 MB