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Originally Posted by rowan
I found out recently that the procedure for a Visa chargeback (in this neck of the woods anyway) is something along the lines of:
- customer calls to dispute charge.
- bank mails out form for customer to sign.
- when bank receives signed form they apply a provisional credit so that the customer isn't charged interest on the disputed amount.
- if the merchant doesn't respond within 45 calendar days with a good reason then the credit adjustment becomes permanent, and the merchant has to cover the transaction amount plus the applicable fees.
My question is: why don't third party billers pass the chargeback request over to their merchants so that they have a chance to contest it?
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You are comparing apples to oranges. VISA rules are so complex that they fill volumes the size of an encyclopedia.
Processors would LOVE to be able to dispute retrieval requests. This doesn't apply to third party processors uniquely. The problem is that with intangible items purchased with a card-not-present transaction, VISA principal issuing banks automatically send a chargeback, and don't wait for the retrieval. ESPECIALLY with the merchant catagory code for adult attached to the transaction.
This is primarily a result of the massive fraud committed through the online adult industry in the late 90s and early 2000s. With no way to prove or disprove delivery of the product, and no way to truely verify the identity of the card user, many very large players pulled some really huge amounts of CC fraud without ever going to jail.