Disputes & Fraud………… The Differences PCard Summer School July 30, 2009 Dureen Berg, PCard Coordinator

Overview Identify disputable and fraudulent transaction Definition of disputes and fraud Dispute and fraud process Fraud investigation and recovery Transfers, credits and charge backs Questions/Discussion

Dispute or Fraud????? A transaction is in PaymentNet that you dont have a receipt for and the cardholder does not recognize the transaction. Should you dispute it or report it as fraud? A PCard was charged for merchandise received, but the cardholder informed you that it was paid for with a check. What action should be taken?

Fraud and Disputes Defined Fraud Fraud is defined as an unauthorized transaction(s) made with a lost, stolen, compromised or counterfeit card/card number Dispute Disputable transactions are merchant errors or errors in billing between the merchant and cardholder. Some examples include: multiple billing, billing wrong amount, billing without receiving merchandise, billing on a cancelled order.

Additional Dispute Information Dispute process does not stop or delay payment of the charge Recurring charges It is cardholders responsibility to cancel any reoccurring charges should the card be canceled (i.e.. Internet, cell phone, etc)

Dispute Process Cardholder contacts merchant Problem is not resolved Reconciler/approver contacts PCard office prior to initiating dispute in PaymentNet Dispute must be initiated within 60 days from the statement cycle date that the disputed charge appears Reconciler/approver enters dispute in PaymentNet JPMorgan Chase bank puts transaction into dispute status JPMorgan Chase bank applies temporary chargeback credit to PCard JPMorgan Chase bank contacts merchant bank Merchant bank has 45 days to submit rebuttal to JPMorgan Chase dispute department No merchant response - chargeback credit becomes permanent Merchant responds – rebuttal sent to cardholder for response Cardholder must respond within specified time period or dispute dropped Can result in arbitration with VISA for additional 30 days

How do I dispute a transaction? Reconciler or approver selects transaction to access detail screen

Documentation needed Dispute Reason I have been billed for an incorrect amount Merchant was to issue credit for merchandise returned to the store I have been charged for purchase that was paid for by other means Merchandise/Service received damaged or not as described Additional Documentation Needed Copy of receipt that shows correct amount Copy of credit receipt received at store Copy of documentation showing the other method of payment: cash receipt, copy of check, copy of other credit card statement, etc Copy of returned mail receipt from returning the merchandise

PaymentNet A yellow square appears next to disputed transaction Yellow Square Indicator Square will turn red indicating transaction is in dispute process

PaymentNet Posted 05/13/ /24/2009 DUCK DONALD CHARGEBACK CREDIT ($41.78) Enter note in transaction detail screen indicating credit is for transaction , your initials and date Posted 05/13/ /15/2009 DUCK DONALD NATIONAL SEED CORP $41.78 Enter note in transaction detail screen referencing transaction number for credit

Fraud Process-Individual PCard Fraud is identified on PCard Fraud charges should NOT be disputed in PaymentNet Cardholder notifies JPMorgan Chase Bank (800) and PCard office PCard cancelled and new Pcard issued Cardholder informs UAPD of fraudulent transaction and obtains case number Department provides PCard office with UAPD case number Fraud affidavit sent to cardholder Cardholder returns affidavit to bank and copies PCard office Bank recovery investigator requests documentation from merchant(s) on the fraud transaction(s) (Process takes days) Chargeback credit(s) issued after settlement

Fraud Process-Department PCard No fraud rights through JPMorgan Chase Bank on a department PCard Fraud is identified on PCard Fraud charges should NOT be disputed in PaymentNet Cardholder notifies JPMorgan Chase Bank (800) and PCard office PCard cancelled and new PCard issued Cardholder informs UAPD of fraudulent transaction and obtains case number Department provides PCard office with UAPD case number Fraud affidavit sent to cardholder Cardholder returns affidavit to bank, copies PCard office and Risk Management (if property loss report submitted)

Fraud Process-Department PCard Submit Property Loss Report to Risk Management if total incident is $100 or more Make two written attempts to have Merchant reverse charge Provide Risk Management with merchants response Inform PCard office and Risk Management if merchant credits PCard

How do I reconcile/approve fraudulent transaction and transfers? Code to FRS account with money Mark transaction service/tax exempt Indicate in transaction detail screen transaction fraudulent, PCard cancelled, PCard office notified, initial and date Cross reference fraudulent transaction with credit and transferred transaction Print Transaction Detail screen and submit with monthly receipts to FSO Compliance

What do the XFRDs mean? Old account ending 1234 closed and all transactions automatically transferred to the new account ending 2345 Old account ending 1234 manually debited to house dollars until fraud investigation completed New account ending 2345 credited Final chargeback credit applied to the old account ending 1234 IDT DateP DateLNameFNameMerchant NameTranAmtSrvc/tax exmptFRS AcctOCDeptAcct # /26/09 DUCKDONALDFRAUD CHARGEBACK-$ /6/09 DUCKDONALD XFRD/DAFFY FEEDS/ 1234-$ /6/09 DUCKDONALD XFRD/DAFFY FEEDS/ 2345$ /1/091/3/09DUCKDONALDDAFFY FEEDS$

Questions/Discussion