First Party Fraud occurs when a cardholder is looking for reimbursement or a credit for a legitimately purchased good or service, resulting in a potential dispute and creating additional costs for all parties.

Effective April 17, 2020 (20Q2), the Visa Rules will be modified for Acquirers as followed:

  1. Card Not Present Merchant Requirement to Validate Cardholder Approval:
    • Merchants that have account-on-file business that see high volume of ch transactions within a single day will be required to set daily base-level cardholder velocity controls.
    • The limit should be set by the merchant but cannot exceed a maximum of 25 trans.
  2. Merchant Withdrawal of Services or Assets Following a Fraud Dispute:
    • Merchant will be required to revoke goods/services where practical after a fraud dispute (that the merchant believes is a legitimate trans) and establish a process to prevent the ch from having a recurring trans that could be disputed.
  3. Contact Information in Trans Details for High Dispute Merchants:
    • Card Not Present merchants are currently required to include contact information within the merchant location field of the authorization message.  
    • This will allow cardholders to contact the merchant more easily instead of going to the issuer

Merchant best practice guides is included in this article.

Article # 36000222950