Dispute Reasons

Created by Allison Cloyd, Modified on Tue, 10 Jan 2023 at 08:06 PM by Robert Butler

It is possible for a client to challenge a credit card payment once it has been made, requesting that their credit card provider reverse a payment on their card. There are various stages to a dispute and you as the person who received the payment may be asked for details of what the payment is for and you have the option to contest a challenge.

In this article, we explain the types disputes that there can be. You may also want to read our articles on Understanding Credit Card Disputes and Understanding What to Provide in your Response to Disputes.

 

KEY TERMS

Cardholder:         The client that is disputing a transaction

Merchant:            You, the law firm who provided the services being disputed

Issuing Bank:      The bank that issued the card to the client (i.e. the cardholder’s bank)

Card Brand:         The card brand the client’s card is associated with (Visa, Mastercard, Amex etc.)

Representment:  The response a Merchant sends to the issuing bank when a transaction is disputed

 

Dispute Reasons

When a cardholder disputes a transaction, their issuing bank will request a detailed explanation of the problem from them. Once the issuing bank receives and validates the cardholder’s complaint, a dispute is initiated against the Merchant. There are many reasons for a cardholder to initiate a dispute which the issuing bank considers valid - and understanding each of these valid reasons will help the Merchant respond to disputes accordingly.

When a dispute is initiated it includes a reason code classifying the cardholder’s complaint. The actual reason codes vary by Card Brand, but disputes can generally be classified into four categories:

 

Fraud disputes

Fraud disputes occur when the cardholder claims their payment information was fraudulently used by another individual to purchase goods/services from the Merchant. 

 

Authorization disputes

Authorization disputes occur when a Merchant submits a payment with an invalid or expired authorization code. For example, if a Merchant authorized their customer's card without fully completing the transaction, and then captured the payment - with a now-expired authorization code - at a later date, this may result in an authorization dispute.

 

Processing error disputes

Processing errors generally indicate a payment submission error by the Merchant resulting in the cardholder initiating a dispute. For example, this can include the Merchant submitting incorrect data or using the wrong payment method other than the one the cardholder intended for them to use etc.

 

 

Customer complaint dispute reason codes by Card Brand

 

Card Brand

Fraud Reason Codes

Visa

  • 10.1 EMV Liability Shift Counterfeit Fraud

  • 10.2 EMV Liability Shift Non-Counterfeit Fraud

  • 10.3 Other Fraud: Card-Present Environment / Condition

  • 10.4 Other Fraud: Card-absent Environment / Condition

  • 10.5 Visa Fraud Monitoring Program

Mastercard

  • 4837 No Cardholder Authorization

  • 4840 Fraudulent Processing of Transactions

  • 4849 Questionable Merchant Activity

  • 4863 Cardholder Does Not Recognize / Potential Fraud.

  • 4870 Chip Liability Shift

  • 4871 Chip / PIN Liability Shift--Lost / Stolen / Never Received Issue (NRI) Fraud

Amex

  • FR2 Fraud Full Recourse Program

  • FR4 Immediate Chargeback ProgramFR2 Fraud Full Recourse Program

  • FR4 Immediate Chargeback Program

  • FR6 Partial Immediate Chargeback Program

  • F10 Missing Imprint

  • F14 Missing Signature

  • F24 No Cardmember Authorization

  • F29 Card Not Present

  • F30 EMV Counterfeit

  • F31 EMV List / Stolen / Non-received Inquiry / Miscellaneous

  • R03 Insufficient Reply

  • R13 No reply

  • M01 Chargeback Authorization

  • FR6 Partial Immediate Chargeback Program

  • F10 Missing Imprint

  • F14 Missing Signature

  • F24 No Cardmember Authorization

  • F29 Card Not Present

  • F30 EMV Counterfeit

  • F31 EMV List / Stolen / Non-received Inquiry / Miscellaneous

  • R03 Insufficient Reply

  • R13 No reply

  • M01 Chargeback Authorization

Discover

  • UA01 Fraud / Card Present Environment

  • UA02 Fraud / Card-Not-Present Environment

  • UA05 Fraud / Counterfeit Chip Transaction

  • UA06 Fraud / Chip-and-Pin Transaction

  • UA10 Request Transaction Receipt (swiped card transactions)

  • UA11 Cardholder claims fraud (swiped transaction, no signature)

 

 

 

Authorization dispute reason codes by Card Brand

 

Card Brand

Fraud Reason Codes

Visa

  • 11.1 Card Recovery Bulletin

  • 11.2 Declined Authorization

  • 11.3 No Authorization

Mastercard

N/A

Amex

  • A01 Charge amount exceeds authorization amount

  • A02 No valid authorization

  • A08 Authorization approval expired

Discover

  • AT Authorization Non-compliance

  • DA Declined Authorization

  • EX Expired Card

  • NA No Authorization

 

 

Processing error dispute reason codes by Card Brand

 

Card Brand

Fraud Reason Codes

Visa

  • 12.1 Late Presentment

  • 12.2 Incorrect Transaction Code

  • 12.3 Incorrect Currency

  • 12.4 Incorrect Account Number

  • 12.5 Incorrect Amount

  • 12.6 Duplicate Processing / Paid by Other Means

  • 12.7 Invalid Data

Mastercard

  • 4831 Transaction Amount Differs

  • 4834 Point of Interaction Error

  • 4842 Late Presentment

  • 4846 Incorrect Currency Code

Amex

  • P01 Unassigned Card Number

  • P03 Credit Processed as Charge

  • P04 Charge Processed as Credit

  • P05 Incorrect Charge Amount

  • P07 Late Submission

  • P08 Duplicate Charge

  • P22 Non-Matching Card Number

  • P23 Currency Discrepancy

Discover

  • IN Invalid Card Number

  • LP Late Presentment


Related Articles:

- Understanding Credit Card Disputes

- Understanding What to Provide in your Response to Disputes 

- Submitting a Dispute Response through the Payments Portal