Visa Cracks Down on Counterfit and Malicious Software

Consumers now have additional leverage against on-line and telephone scammers selling counterfeit, malware-infected or "snake oil" tune-up programs.

What follows is an e-mail I received from my credit card processing company (I've edited it a bit to focus on the computer software part).

Although this initially applies only to Visa cards, my experience has been the other card issuers (MasterCard, Discover and AMEX) will copy this if they haven't done so already.

If you don't want to read all the boring fine print, the takeaway is that any customer who has been scammed on a software purchase with their Visa card can easily dispute the charges and likely get a refund.


Beginning October 13, 2012, issuers can charge back certain transactions under Reason Code (RC) 53 for Visa transactions or RC A21 for Interlink transactions, if a cardholder claims either:

the terms of sale were misrepresented by the merchant; or
to have been sold counterfeit goods.

Chargebacks based on a claim that the terms of the sale were misrepresented by the merchant are restricted to transactions for the following merchant category codes (MCCs). It does not apply to issuers or acquirers in the Visa Europe region.

7012 — Timeshares.

7277 — Counseling Services: Debt, Marriage and Personal.

Merchants that sell computer anti-virus security software products in a card-not-present environment using one or both of the following deceptive marketing practices to promote their offerings:

Inaccurate online advertisement

Malicious software downloaded onto a consumer’s personal computer (or similar electronic device)


For all Chargebacks based on a claim that the cardholder was sold counterfeit goods, the issuer will be required to provide information confirming the cardholder was notified that the goods were counterfeit. Below is a list of possible sources of this confirmation:

The rights-holder or owner of the intellectual property, either through direct inspection of the merchandise or through a broader public notice, has identified the merchandise as counterfeit

A customs agency, law enforcement agency or other government entity believes the merchandise is counterfeit

A neutral third-party expert with relevant experience/expertise in the type of merchandise was involved in the transaction

The cardholder will not be required to return the counterfeit goods or attempt resolution with the merchant. However, the issuer will be required to identify the current disposition of the counterfeit goods. This condition does include the Visa Europe region.


The time frame for initiating a chargeback under this type of claim is 120 days from the date the merchandise was received or the cardholder was notified that the merchandise was counterfeit, whichever is later. A chargeback may also be initiated even if the cardholder has not received the goods, and the maximum time frame is 540 days from the transaction date.

 

this is not a good news to Merchants.

Visa is covering only cardholders. Visa should provider shelter to merchants as well.

What should merchants do in such situation?

 

Legitimate retailers and service providers should have nothing to fear. When I worked in big box retail, stores that grossed $15-$20 million per year received (on average) only one or two chargeback requests per year - almost all of which were traced to credit card fraud that was not the fault of the merchant.

This revision will make it harder for scammers to collect funds via credit card. As an example, the "FBI Virus" only accepts payment via a MoneyGram-type prepaid card and not by any card carrying the Visa, MC, Discover or AMEX brand that could be subject to chargeback protection.

 

Hey,, if it is true.. than it means i can still get a refund by calling my bank? I bought a software online.. but it was useless but it has been more than six months to that transaction.

Somebody told me that i can not go for chargeback after six months of the transaction?

Now after reading this, i presume that now i can go for chargeback from my visa card???


Can anybody here helppppppppp!

 

I'd give it a try - the worst the bank can do is say no. If you go to the bank in person, you might want to print out my original post so they can look it up.