The new rules for the US market apply to disputes processed on or after October 16, 2021, and effect the following:
- Travel-related disputes under Dispute Category 13 (Consumer Disputes)
- Time frame reductions for third-party gift cards
- Use of compelling evidence for dispute response
- Credits/reversals processed prior to dispute
- Misrepresentation of investment products or services
- Wait time limits for Dispute Condition 13.7 (Cancelled Merchandise/Services)
- Rapid Dispute Resolution (RDR) credit issued
Wait time limits for Dispute Condition 13.7 (Cancelled Merchandise/Services)
Effective for disputes processed on or after October 16, 2021, before initiating a dispute, an issuer must wait 15 calendar days from the date the merchandise was returned, or services were cancelled. This is intended to reduce the incidence of refunds and chargebacks “crossing paths”, which was occurring in cases where a refund was in process to the cardholder but had not yet posted prior to the chargeback being filed. “Crossing paths” causes additional work for the issuer and the processor and sometimes result in duplicate refunds.
Use of Compelling Evidence for Dispute Response
Currently, for Dispute Condition 13.1 (Merchandise / Services Not Received), issuers are only required to address the information provided at the pre-arbitration stage if the documentation/information meets the allowable use of compelling evidence.
Effective for dispute responses processed on or after October 16, 2021, the issuer will be required to address all information supplied as evidence that the cardholder (or an authorized person) received the merchandise or services. This will help ensure that all of a merchant’s arguments are heard and is expected to result in merchants “losing” fewer chargebacks, especially if the customer is making a false claim about not receiving items ordered.
Mandatory Wait Time for Travel Related Disputes (Consumer)
To avoid the problem of cardholders receiving a refund from a travel agent and a travel provider for the same trip, effective for dispute responses processed on or after October 16, 2021, issuers must wait at least 30 days from the date of purchase before a chargeback can be issued for “merchandise/service not received” for Merchant Category Code 4722—Travel Agencies and Tour Operators. This additional time will allow the travel agent time to reschedule the travel or tour, or issue a refund to the card, and reduce the risk of duplicate refund.
A bulletin from VISA with additional detail on all the changes can be found here.
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