Issuer Perspective

Issuer Perspective

Complex Dispute Resolutions

Dispute resolution is a complex and intricate process which requires careful understanding to keep losses at a minimum, while at the same time assist the customer and identify the various chargeback options that are available.

Chargebacks can be categorized into two categories; fraud and service related disputes. 75% to 80% of disputes are related to fraud and friendly fraud. Issuing a fraud related chargeback is a relatively simple process, all it takes is a call to the bank to notify them about any unauthorised charges made on your credit or debit card. Identifying what is referred to as “Friendly Fraud” is a little more difficult. Friendly fraud occurs when customers issue a chargeback for goods or services received in good order and as advertised. It is a fraudulent and manipulative way of trying to take advantage of the chargeback process.

The remaining 20% to 25% of chargeback cases are significantly more complex and deal with goods and service related disputes. This typically involves a customer that has purchased goods or services and is unable to resolve a particular issue with the merchant regarding the transaction.

Service related disputes may involve:

  • Goods not received
  • Damaged goods
  • Goods not as per the ads
  • Inferior quality product

Each card network has its own detailed rulebook that governs chargebacks for the numerous situations that may arise. Each chargeback rule is different and complex in its own way and is constantly evolving.

If for example, a customer received a sub standard quality product, they need to first contact the merchant to attempt to resolve the dispute before they proceed with a chargeback dispute. If for example, a product is not received. There are in fact hundreds of examples where the rules and regulations differ.

Difficult to keep up competence of your employees

Visa and Mastercard enact changes to their rules twice a year. Subsequently, staff and employees need to be properly trained and kept up-to-date on a regular basis. It requires a deep understanding of the complexities involved within dispute resolution and the chargeback sphere.

Unfortunately, what we find is that too many dispute departments are poorly trained when it comes to understanding the complexities and intricacies surrounding complex disputes. The banks spend an enormous time and effort and resources in training for fraud since that results in as mentioned above 75-80 % of chargebacks.. The emphasis is rightly placed on fraud however the goods/ service sphere is not trained in the same manner.

As bank employees are forced to adapt to unfamiliar roles, dispute resolution is only becoming more and more complex and involved.

Time Consuming Procedure / Expensive for you to handle

Besides the complexities involved, complex dispute resolution requires a hands-on approach. The common understanding in the industry is that service related disputes from the initial chargeback to final adjudication can take up to 6 months or more, depending on the complexity of the case.

With this in mind, chargebacks and dispute resolution success is all about volume. The more cases to run with, the better ability one has to automate the process to make it as efficient and successful as possible.

Bank dispute departments process chargebacks for the credit cards they issue. These departments constantly struggle with the influx of chargeback requests and were already swamped before the coronavirus pandemic and subsequent shutdowns.

Time Consuming Procedure / Expensive for you to handle

The way you handle your recoveries will affect your customer satisfaction

The dispute team is often organised within the operation department. The main focus for operations is efficiency and productivity. When it comes to dispute resolution however, efficiency and productivity, although important and necessary, are not the central focus and priority.

Customers who have experienced fraud or are in the midst of a dispute are from the start very overwhelmed and confused and their anxiety levels are high, especially those that have lost a considerable amount of money. Studies have shown that providing consumers with the high level of assistance required and are entitled to according to chargeback rules and regulations, ensures a very high level of satisfaction and loyalty to their bank.

These experiences that customers share with family and friends creates strong and loyal ambassadors for your brand.

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