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#2249134 - 02/11/21 08:34 PM Visa Non-Reg E Claim Scenarios & Best Practices
racingtofriday Offline
New Poster
Joined: Nov 2014
Posts: 17
Customers are continuously falling for scams or purchasing from merchants who are not following through with orders/services. Examples would be Non-Receipt of Merchandise/Service or Not as Described Merchandise/Service. Although, the Visa resolution process does offer the ability to pursue disputes, the issue we are currently questioning is whether we should be offering the when a dispute is filed on a money transfer or 3rd party merchant, or if we have the right to decline these disputes and require that the customer exclusively works with the merchant directly for a resolution. Examples of these merchants are PayPal, Venmo, Square, Cash App, and Zelle.

Money Transfer Transactions
Scenario: A customer used a money transfer merchant to send funds to pay for a puppy. The customer did not receive the puppy. They are now disputing that merchandise was not received for their payment.

When reviewing the Merchant Category Code (MCC 4829-Money Transfer), the customer’s transaction is seen as a money transfer, not the purchase of goods/services. Therefore, in this scenario, the merchant has made no error in the service. The problem/dispute is with the seller offering the merchandise; therefore this is not a valid dispute to file with the Bank. The customer must work directly with the seller or merchant offering the money transfer service.  Would you agree that declining this dispute is valid for the Bank to proceed with?

3rd Party Merchant Transactions
Scenario: A customer used a 3rd party merchant to purchase a puppy. The customer did not receive the puppy. They are now disputing that merchandise was not received for their payment.

When reviewing the Merchant Category Code (MCC 5970-Artist Supply & Craft Stores) and the merchant name as ‘PAY WITH VENMO’, the customer’s transaction is seen as a transaction with Venmo, not with the direct seller. These 3rd party merchants (Venmo, PayPal etc.) provide their own dispute resolution process, is the Bank still obligated to resolve this through Visa’s dispute resolution process or can we proceed with declining to state that they must work directly with the seller or merchant for their resolution?

Thank you in advance for you time! 😊

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eBanking / Technology
#2249139 - 02/11/21 08:57 PM Re: Visa Non-Reg E Claim Scenarios & Best Practices racingtofriday
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,017
Illinois
Quote
Money Transfer Transactions Would you agree that declining this dispute is valid for the Bank to proceed with?


Yes. There is no Reg E protection and no V/MC chargeback options. Sending money via person to person transfer services is no different that handing a stranger on the street an envelope filled with cash.

Quote
3rd Party Merchant Transactions is the Bank still obligated to resolve this


Again there is no Reg E coverage. There are no V/MC chargeback rights available unless the cardholder first jumps through the hoops of trying to resolve with the merchant which in these cases would be to use the third party's dispute resolution process. If this fails to resolve the dispute and the customer provides adequate documentation for you to conclude that the merchant acted improperly, then you would file a chargeback at that time. Unlike a Reg E claim, the burden of proof is on the customer when there is a dispute with the merchant for non-receipt of merchandise.
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#2249185 - 02/12/21 06:26 PM Re: Visa Non-Reg E Claim Scenarios & Best Practices BrianC
racingtofriday Offline
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Joined: Nov 2014
Posts: 17
This helps a ton! Thank you so much Brian! smile

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