Visa chargeback reason code 10.1, also known as “EMV Liability Shift Counterfeit Fraud,” is used when a cardholder disputes a transaction due to counterfeit fraud. This typically occurs when a chip card is used at a non-chip-enabled terminal, and the transaction is later identified as fraudulent.
Causes
- Non-chip-enabled terminals: Transactions processed on a magnetic stripe reader instead of an EMV chip reader.
- Counterfeit cards: Fraudsters use cloned cards with legitimate account information.
Time Frame for Resolution
The chargeback must be filed within 120 calendar days from the transaction date. However, the overall resolution time can vary based on the specific case and the responsiveness of all parties involved.
Merchant Has 30 Days.
Prevention and Mitigation
1. Upgrade to EMV Chip Technology
Ensure all point-of-sale (POS) terminals and payment processing systems are EMV-compliant. EMV technology significantly reduces the risk of counterfeit fraud by requiring the physical presence of the chip card.
2. Train Staff
Educate your staff on the importance of processing chip card transactions using the chip reader rather than the magnetic stripe reader.
3. Regular Maintenance and Updates
Keep your payment terminals and systems up to date with the latest security patches and software updates.
4. Monitor Transactions
Implement fraud detection tools and regularly monitor transactions for any suspicious activity. This includes setting up alerts for transactions that fall outside normal patterns.
5. Verify Cardholder Information
Use additional verification methods, such as requesting a valid ID or signature, to confirm the identity of the cardholder during transactions.
6. Maintain Records
Keep detailed records of all transactions, including receipts and any correspondence with customers. This can be helpful in disputing chargebacks.
7. Work with Payment Processors
Collaborate with your payment processor to understand and implement the best practices for preventing fraud and managing chargebacks.
