Skip to content

Who Pays for Visa's Zero Liability?

Answered by: 

Question: 
Who pays for Visa's zero liability? Is it the banks/credit unions or is it Visa? Recently, my company (a credit union) took a 45k hit in one month due to Visa's zero liability. We have seen a ton of claims due to PlayStation 3's security issue. I always thought that visa picked up the bill.
Answer: 

Liability for unauthorized charges is determined by VISA Operating Rules. These are the terms to which an institution must agree in order to issue VISA cards. Ultimately the issuing financial institution bears the majority of the risk for fraudulent activity. This is offset by the interchange fees the institution receives.

If VISA determines that a data breach such as the occurrence at Sony was the result of a violation of VISA's operating rules regarding magnetic strip data storage or PCI non-compliance, VISA may, at its discretion, implement the Account Data Compromise Recovery Process (ADCR). VISA will determine the number of cards affected and the amount of fraud that can be attributed to the event and assign a recovery amount to each issuer and bill the member responsible for the breach.

First published on BankersOnline.com 6/13/11

First published on 06/13/2011

Filed under: 
Filed under security as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics