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Visa Chargeback Reason Code 62: Counterfeit Transaction

Visa chargeback reason code 62, “Counterfeit Transaction,” is used when a cardholder claims that a transaction was made using a counterfeit card. This means the transaction was processed with a card that has been fraudulently altered or cloned.

Causes of Code 62: Counterfeit Transaction

  1. Card Data Compromise: Sensitive cardholder information is stolen, often through skimming devices or data breaches.
  2. Skimming Devices: Devices placed on card readers capture card information during legitimate transactions.
  3. Data Breaches: Hackers gain unauthorized access to cardholder data from merchant databases or payment processors.
  4. Weak Security Measures: Insufficient security practices, such as not using EMV (chip) technology, can make it easier for fraudsters to counterfeit cards.

Prevention and Mitigation of Code 62: Counterfeit Transaction

  1. Upgrade to EMV (Chip) Technology: Ensure that your point-of-sale (POS) systems support EMV chip cards, as these are more secure than magnetic stripe cards.
  2. Implement Tokenization: Use tokenization to replace sensitive card information with a unique identifier (token) that cannot be used outside the specific transaction context.
  3. Use Encryption: Encrypt cardholder data during transmission and storage to protect it from unauthorized access.
  4. Regularly Update Software: Keep your payment systems and software updated with the latest security patches and updates.
  5. Monitor Transactions: Use advanced fraud detection and prevention tools to monitor transactions for suspicious activity.
  6. Educate Staff: Train your employees to recognize and respond to signs of card fraud, such as unusual customer behavior or tampered card readers.
  7. Secure POS Terminals: Regularly inspect POS terminals for signs of tampering and ensure they are in secure locations.
  8. Conduct Security Audits: Regularly audit your systems and processes to identify and address potential vulnerabilities.

How to Respond to a Chargeback

  1. Gather Evidence: Collect all transaction documentation, such as sales receipts, shipping confirmations, and any communication with the cardholder.
  2. Submit Compelling Evidence: Provide evidence to prove the legitimacy of the transaction, including any security measures taken during the transaction.
  3. Review Chargeback Trends: Analyze chargeback data to identify patterns and address underlying issues in your transaction processes.
  4. Enhance Customer Verification: Implement additional customer verification steps, such as requiring CVV codes or using 3D Secure authentication.

By taking these steps, you can reduce the risk of counterfeit transactions and effectively respond to chargebacks when they occur.

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