Dispute classification
Pega Smart Dispute™ Agentic Automation (SDAA) supports end-to-end dispute processing by using the real-time interfaces. The card networks classify disputes into specific types which helps issuer banks or networks provide more accurate dispute resolutions to enhance customer service. A dispute is mapped to a dispute category and then to its sub-category based on the scenario of the dispute. Each dispute category has time constraints on it based on the age of the transaction or when the merchandise / service was or was to be received and so on. Some dispute categories have documentation requirements. All these details on dispute sub-categories are available in the chargeback documentation periodically released by card networks.
The dispute categories use reason codes that are assigned to each dispute by the card issuer or the card network. These codes indicate the cause and the status of the dispute and help the parties involved resolve it.
Visa dispute categories and subcategories
The dispute reasons supported by Visa consist of the four following categories:
- Fraud: Disputes that involve unauthorized or fraudulent transactions, such as stolen cards, counterfeit cards, identity theft, or phishing. Cardholders claim that they did not authorize or participate in the transaction and request a chargeback.
- Authorization issues: Disputes that arise from errors or mistakes in the authorization process, such as expired cards, invalid cards, and declined transactions. Cardholders claim that the transaction was not properly authorized.
- Processing errors: Disputes that stem from discrepancies or errors in the transaction amount, date, currency, location or duplicate transactions. Cardholders claim that they received a charge for a different amount than what they agreed to pay or received a charge in a different currency or at a different location than what they expected or that they were charged more than once for the same transaction.
- Consumer disputes: Disputes that involve problems with the product or service that the cardholder purchased from the merchant, such as defective goods, damaged goods, non-delivery, late delivery, or cancellation. Cardholders claim that they did not receive what they paid for or that they were not satisfied with the quality or performance of the product or service. Consumer disputes also include credit issues. Credit issues are disputes that relate to refunds, credits, or adjustments that the cardholder requested from the merchant but did not receive or did not receive correctly. Cardholders claim that they returned the product or canceled the service but did not receive a full or partial refund or that they received a credit or adjustment, but it did not apply to their account.
The dispute category and its subcategories are shown in the following table:
|
Dispute category |
Dispute subcategory |
|
10 - Fraud |
10.1 – EMV Liability Shift Counterfeit |
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10.2 – EMV Liability Shift Non-Counterfeit |
|
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10.3 – Card Present Environment |
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10.4 – Card Absent Environment |
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10.5 – Visa Fraud Monitoring Program |
|
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11 - Authorization |
11.1 – Card Recovery Bulletin |
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11.2 – Declined Authorization |
|
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11.3 – No Authorization/Late Presentment |
|
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12 – Processing Errors |
|
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12.2 – Incorrect Transaction Code |
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12.3 – Incorrect Currency |
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12.4 – Incorrect Account Number |
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12.5 – Incorrect Amount |
|
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12.6.1 – Duplicate Processing |
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12.6.2 – Paid by Other Means |
|
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12.7 – Invalid Data |
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13 – Consumer Disputes |
13.1 – Merchandise/Services Not Received |
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13.2 – Cancelled Recurring Transaction |
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13.3 – Not as Described/Defective |
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13.4 – Counterfeit Merchandise |
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13.5 - Misrepresentation |
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13.6 – Credit Not Processed |
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13.7 – Cancelled Merchandise/Services |
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13.8 – Original Credit Not Accepted |
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13.9 – Non-Receipt of Cash/Load |
Mastercard reason codes
Dispute categories in Mastercard are represented by two- or four-character codes referred to as reason codes. The reason codes, their descriptions, and their subcategories supported by Mastercard are shown in the following table:
|
Reason Code |
Description |
Subcategories |
|
4808 |
Authorization-related Chargeback |
Required Authorization Not Obtained |
|
Expired Chargeback Protection Period |
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Stand-in or X-Code Approval after Issuer Decline |
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CAT 3 Devices |
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Transit First Ride Risk (FRR) Claims |
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4834 |
Point-of-Interaction Error |
Cardholder Debited More than Once for the Same Goods or Services |
|
Transaction Amount Differs |
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Cash was not properly provided from either a Purchase with Cash Back transaction or a Cash Back transaction without an Accompanying Purchase |
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ATM Funds Not Dispensed |
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Charges for Loss, Theft, or Damages |
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Currency Errors |
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Merchant Refund Correcting Error Resulted in Cardholder Currency Exchange Loss |
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Improper Merchant Surcharge |
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Unreasonable Amount |
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4837 |
No Cardholder Authorization |
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4849 |
Questionable Merchant Activity |
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4850 |
Installment Billing Dispute |
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4853 |
Cardholder Dispute Chargeback |
Goods or Services Were Either Not as Described or Defective |
|
Goods or Services Not Provided |
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Travel/Entertainment Services Not Provided/Not as Described and Merchant Voucher Issued |
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Failed Travel Merchant-Intra-EEA and Domestic European Transactions Only |
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Travel/Entertainment Services |
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Cancelled/Returned and a Refund was Not Processed |
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Digital Goods Purchase of USD/EUR 25 or Less |
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Counterfeit Goods |
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Cardholder Dispute of a Recurring Transaction |
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Issuer Dispute of a Recurring Transaction |
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"No-Show” Hotel Charge |
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Transaction Did Not Complete |
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Timeshares |
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Refund Posted as a Purchase |
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4854 |
Cardholder Dispute-Not Elsewhere Classified |
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4870 |
Chip Liability Shift |
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4871 |
Chip Liability Shift-Lost/Stolen/Never Received Issue (NRI) Fraud |
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