A dispute is an inquiry that occurs when an account holder questions a transaction on their account. In most cases, the purpose of filing a dispute is to recover funds for transactions that have already been debited. Usually, the transaction in question is a debit transaction, as in, there was money withdrawn from the account.
A dispute could be filed for any transaction type: Intrabank, ACH, Wire, Check, or a Card transaction. Solid triages every dispute and creates a formal process with the involved parties.
Timeframes for Disputes
- Intrabank Disputes - Solid investigates internally. Turnaround time is up to 7 days.
- ACH, Wire, Check Disputes - Solid investigates with DDA sponsor bank. Turnaround time is up to 30 days.
- Card Disputes - Solid investigates with sponsor bank and the network. Turnaround time is up to 90 days. From the original transaction date, cardholders have no more than 110 days to file a dispute.
Quick Guide to Filing a Dispute with Solid
More detailed information on requirements for the dispute process follow this section, but this will give you a high level introduction.
Solid requires a minimum disputed amount of $25 to process a dispute in order to comply with card network rules. For disputes under $25, programs must conduct their own due diligence on each case to resolve it according to regulations and card network rules.
First, you should encourage your account holder to resolve the dispute directly with the counterparty, merchant, or service provider. If the account holder has exhausted all means of resolving the issue directly, please proceed to file a dispute via the Solid Dashboard:
- Locate the transaction in question in the Payments tab of the Solid Dashboard
- Click the Dispute button at the top right of the Transaction Details screen
- A dispute ticket window will open with the transaction details pre-populated
- Provide all the information related to the transaction being disputed. The more information you can provide on creating the dispute, the shorter the turnaround time. Please include:
- Reason for the dispute
- If the dispute is related to fraud, service not received or not as described, duplicate transaction or if the transaction was unauthorized, and
- Any supporting screenshots which prove the cardholder has tried to resolve this with the merchant or anything else that supports the dispute.
- If the dispute is not fraud related, the cardholder will need to sign and submit the Non-Fraud Dispute Form, which you can provide to Solid in the dispute ticket.
Once the ticket is created, the ticket link will be added to the Notes section. You will also receive an email with the Help Desk ticket number. Solid will continue to update you on the status of the dispute email. To view the latest update, you can view the ticket details in the dashboard.
Reg E and Compliance Requirements
The following outlines roles and responsibilities regarding the disputes process:
- Programs will be responsible for managing the user’s initial dispute intake, communication, crediting/debiting the user’s account and initiating the provisional credit in accordance with Reg E timelines and conditions.
- Upon submission of a dispute ticket (from the Program) to Solid, Solid will file the dispute in the Visa Resolve Online (VROL) system on behalf of the programs for the user’s initiated dispute cases.
- Provisional Credit MUST be provided within regulatory guidelines and timeframes.
What is a “Provisional Credit”?
A provisional credit is a temporary credit applied to your consumer card account. Provisional credit typically occur when a card issuer is attempting to questioning the validity of a charge on your account, resolving a credit error, or resolving a potentially fraudulent charge made in a cardholder’s name. Card issuer issues provisional credits as temporary measures while they investigate a payment issue or dispute. Specific guidance regarding issuance of a provisional credit is stipulated in Regulation E.
What types of transactions qualify for a Provisional Credit (based on Reg E)?
- An unauthorized transaction. This is a transaction that was initiated by someone other than the account holder and the account holder did not receive any benefit from the transfer.
An unauthorized transaction does not include:
- Fraudulent intent by the consumer or person acting in concert with consumer;
Error committed by a financial institution or its employees;
Initiated by person other than consumer owner to whom the consumer owner furnished the card, code or other means of access unless owner notified the bank that transfers by that other person are no longer authorized.
- Incorrect transaction to or from consumer account.
- Omission of a transaction from statement (usually a credit, but not always).
- A computer or bookkeeping error made by the financial institution.
- Receipt of incorrect amount of money at an ATM or other cash dispensing terminal.
- Transaction not properly identified and the customer does not recognize the transaction.
- Consumer request for clarification or other information or documentation to determine whether an error was made.
What types of transactions qualify for a Provisional Credit (based on Reg E)?
Example transaction types that may qualify for Provisional Credit include (but are not limited to) the following:
- Charge error: A transaction that appears to be incorrect, such as a subscription cardholder canceled, an unfamiliar purchase or double charges.
- Fraudulent charge: A transaction initiated by someone other than cardholder without permission, such as in the case of credit card theft.
- The transaction total was more than what the cardholder agreed to at the point of purchase.
- The merchant committed an error in the transaction process.
- The merchant billed the cardholder again for a subscription after the cardholder canceled service.
Example dispute or transaction types that do NOT qualify for Provisional Credit include (but are not limited to) the following:
- Dispute regarding the quality of goods or services, defective merchandise or not as described.
- Non-receipt of goods or services
- Returned merchandise dispute
Regulatory (Reg E) Considerations and Notification Requirements
- Consumer Liability: In order for a user to qualify for a provisional credit they must report the error in accordance with the following:
- If the unauthorized transaction was the result of a lost or stolen device, the user must notify the Program within 2 business days of learning of the loss or theft of an access device (defined as “debit cards, personal identification numbers (PINs), telephone transfer and telephone bill payment codes, and other means that may be used by a consumer to initiate an electronic fund transfer (EFT)”.); OR
- The dispute must be reported no later than 60 days following transmittal of statement when the error first appeared. If the dispute is reported after the 60 day period, an investigation still must occur, but a provisional credit is not required.
Same liability calculations apply to determine customer liability as for a timely reported dispute.
- A user may report a dispute in either written or verbal format
- From the moment the Program receives the dispute notice from the user/customer, they have 10 business days to either fully resolve their investigation, or to provide a provisional credit for the disputed amount.
- If a user initially communicates an error/dispute to the Program, whether verbally or in writing, and the specific Dispute Form is not included until after the 10 day period, the Program is still obligated to abide by the 10 business day rule from the date of initial notification. They may request the user to follow up by submitting the Dispute Form, but the moment the Program receives the dispute is when the clock starts.
- If the user identifies a specific transaction (e.g., I don’t recognize this transaction from the merchant), or a set of specific transactions (e.g., I don’t recognize any of these transactions from the merchant), that is considered a dispute notice and the 10 day clock starts, since the consumer identified specific transactions as a potential error which requires investigation. However, if they do not specify a transaction, that may not constitute a dispute until they clarify which specific transaction they are referring to (e.g., I don’t recognize some of these transactions from the merchant - this isn’t specific to conduct an investigation).
Reg E Notification Requirements
If the initial investigation of the dispute can be resolved within 10 business days* from the initial notice date...
- If Program determines that an error did occur–
- The error needs to be corrected within 1 business day of decision.
- If a provisional credit was initially applied, make the credit final and notify customer in writing that the provisional credit is now final.
- Provide customer notification within 3 business days of completing the investigation. [Recommended to notify the customer as soon as the error is corrected.]
- Note: Final resolution cannot be reversed, even if more information later proves the error did not occur.
- If Program determines that an error did not occur–
- Provide customer notification with written explanation of the findings and rationale within 3 business days of completing the investigation.
- If a provisional credit was initially applied, reverse the credit and notify customer of the date and amount of the debit for reversal of provisional credit.
- The program will honor any preauthorized transfers, checks, and drafts payable to third parties for 5 business days after sending the notice up to amount of provisional credit, charging no fees for resulting overdraft.
If the initial investigation of the dispute cannot be resolved within 10 business days from the initial notice date...
- Provisional credit must be provided.
- Provide customer notification within 2 business days of providing the credit. [Recommended to notify the customer as soon as the error is corrected.]
* Note: The timeframe increases to 20 business days for transactions from new accounts. A new account is defined as an account opened within the previous 30 days.
* According to Visa’s Zero Liability Policy, provisional credit must be issued to the cardholder within 5 business days for unauthorized transactions.
Filing Disputes with Solid
- Program collects required data points from the user for the “Fraud” vs. “Non-Fraud” dispute cases
a. Fraud: Unauthorized / Unrecognized Transactions
b. Non-fraud: Authorized transactions with reason codes as specified in the dispute form
- Program asks the user if they tried to resolve the dispute directly with the merchant. If not, recommend for the user to contact merchant and try to resolve directly with them, while continuing with the next steps.
- Program reviews dispute details and performs internal investigation (i.e. valid transaction, user and card) to ensure validity of the transactions based on information provided above prior to filing the dispute with Solid. Examples within the investigation include identifying if it is a Card Present vs Card-Not-Present transaction, PIN vs Chip, Lost/Stolen card, etc.
- If Program is able to resolve the investigation and determines it is or it isn’t a valid dispute, they would close the investigation and provide notice to the customer based on the previous slides. However, if they are unable to resolve, they would need to issue a provisional credit (as outlined in the Reg E slides) to the Consumer card account and file a dispute with Solid by raising the Help Desk ticket
- Program should consider having a minimum ‘write-off’ threshold for disputes, considering the cost of filing a dispute with Solid through Visa. Depending on the Program’s dispute volumes, or certain Program-related circumstances, this “de minimis” threshold would identify the threshold in which the dispute might be written off automatically.
a. For example, if a dispute is received for a $5 transaction and the dispute filing fee is $15, it might make sense to write the transaction off without further investigation or filing, depending on certain circumstances.
b. This would be a Program’s risk-based decision and should be monitored to ensure the threshold is appropriate and not abused from potential fraudsters.
Fraud Dispute Cases Data Requirements
Please provide the following details in the Helpdesk ticket via the Solid Dashboard:
- Initial user reported Dispute Date
- Transaction ID
- Card ID
- Dispute Amount (user claiming to file the dispute)
- Reason for dispute and detailed description
- Supporting documentation from the user to attest the dispute claim, if available
- Evidence of the “provisional credit” that was issued to the user’s account for the dispute case
Non-Fraud Dispute Cases Data Requirements
If the dispute is not fraud related, the cardholder will need to sign and submit the Non-Fraud Dispute Form, which you can provide to Solid in the dispute ticket. Fill out the relevant sections as follows:
- Top section (cardholder, transaction, merchant details)
- Appropriate dispute reason code section must be completed
- Evidence of the “provisional credit” that was issued to the user’s account for the dispute case, wherever required as per the reason codes highlighted in the Regulation E requirements.
User Notification Requirements
As per regulations, programs must notify the users regarding dispute status and provisional credit.
- Solid transmits webhook notifications (see below) to the programs for the following dispute statues:
a. Initiated (dispute filed with Visa)
b. Successful (dispute resolved in favor of the cardholder)
c. Declined (dispute resolved and declined)
- Programs must notify the user during the life-cycle of the dispute process at each stage of the dispute status, as stated above
- The user notification can be via chat, email, form, or any other written format.
- Provide customer notification within 3 business days of receiving the Webhooks notification from Solid. However, we recommend notifying the customer as soon as status changes.
Here is a Sample User Notification Template (for illustration purposes only). You can save a copy of this template and edit it for your purposes.
Solid will trigger a webhook notifications to the programs when the status of a dispute is updated:
- Dispute is initiated: card.dispute.updated webhook is triggered with dispute status as initiated
- Dispute is won: card.dispute.updated webhook is triggered with dispute status as successful
- Dispute is lost: card.dispute.updated webhook is triggered with dispute status as declined
Programs can use the webhooks details for the user communication and crediting/debiting user’s account, as appropriate.
Programs are required to provide all dispute cases to Solid on monthly basis for banking compliance/audit requirements.
In order for Solid to meet its oversight responsibilities and for our Partner Bank to have insight into the Program’s compliance with Reg E, programs are obligated to maintain a log of all disputes, regardless of whether it turned into a dispute that was filed with Solid. All dispute inquiries must be logged.
The log will should be submitted to Solid on the 1st of each month with all dispute inquiries from the prior month and any disputes that are still outstanding and not yet resolved from previous months. Solid will then sample the entries to ensure that either investigations are closed out or provisional credits are provided within the required regulatory timeframes. Solid is required to send all logs to our partner bank no later than the 10th of the month, so any delay in getting the data to Solid will delay the submission to the bank.
Here is a Sample Monthly Dispute Tracking Log.
Flow Chart of the Dispute Process