UA05 – Fraud: Chip Card Counterfeit Transaction
Why did I receive this chargeback?
The cardholder has a chip card and someone made a counterfeit copy of it. You processed a transaction with the counterfeit card on a terminal that wasn’t EMV-compliant rather than using a chip reading device that would have detected the fraud. Now, the cardholder claims the purchase was unauthorized.
How long can the issuer wait to file a chargeback?
The maximum amount of time that can pass between the transaction processing date and the chargeback processing date is 120 calendar days.
However, the timeline may be extended if the issuer first submitted a retrieval request. If the retrieval request process finishes after the 120 day deadline, the issuer will have an additional 30 days to file a chargeback.
What compelling evidence is needed to respond?
Examples of compelling evidence that you may submit in response to a chargeback with this reason code include:
- Proof your POS device can support chip card transactions
- Proof the magnetic stripe data was used to complete the transaction and the “fallback” method was noted on the authorization request
- Proof the transaction was key entered
- Proof the transaction was card-not-present
- Proof the card was not chip enabled
- Proof the transaction was a cash advance at an ATM
- Proof that the chargeback is otherwise invalid because it doesn’t adhere to Discover’s requirements
- Proof you have already refunded the transaction and credited the cardholder’s account
How can I avoid this chargeback in the future?
- Always respond to retrieval requests on time and with the required information.
- Only use EMV-compliant terminals.
- Always use the correct cardholder verification method—signature, PIN, etc.
- Create an electronic or manual imprint for every card-present transaction.