As we all know, card company chargeback procedures leave much to be desired. There is basically no way to monitor chargebacks in progress, and nothing official ever comes if you win, only if you lose. What's more, issuing banks make determinations, not the acquiring banks ‒ kind of a kangaroo court. American Express is somewhat better on these issues because they see both sides of the transaction.
Now many issuing banks are rejecting legitimate merchants' chargeback replies even though merchants are filling them out in great detail and proving the original charge is legitimate. It has also been reported that many of the larger banks are just hitting the "rejected" key and denying merchants' replies without reading them.
The airline industry has taken a first step in forcing Visa to modify its policies and procedures. Dishonest cardholders are using their tickets to fly, and after they return, filing chargebacks and actually winning, even though the airlines provide documented evidence the cardholders used their tickets, thereby defrauding (stealing) from the airlines.
Frivolous chargebacks violate federal Regulations E and Z and are a form of felony theft on the part of cardholders. This is causing merchants and the U.S. government billions of dollars in lost revenue. It is estimated that in 2014 U.S. merchants lost $11.8 billion to "friendly" fraud.
We also need a better way to check the validity of all online and MO/TO orders for outright fraud (identity theft). An improvement here would also help reduce "friendly fraud" chargebacks. Foreign card verification is even worse, causing merchants to decline many legitimate foreign card orders, leading to millions of dollars in lost revenue.
I've started a petition to members of Congress that addresses these issues and more at < a href='http://citizengo.org/en/sy/31674-fight-friendly-fraud-and-infair-mcvisadiscoveramex-chargeback-regulations' target="blank">http://citizengo.org/en/sy/31674-fight-friendly-fraud-and-infair-mcvisadiscoveramex-chargeback-regulations. I hope readers will check out the link and get involved.
Bill Hoidas, Matrix Payment Systems
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