Disputes Overview

Sometimes, transactions don’t run smoothly, and a cardholder files a dispute for a given charge, requesting the card issuing bank to reverse the paid amount. This is also called a chargeback.

Why do cardholders file Disputes?

Some common reasons for cardholders to file a dispute include:

• The item was not received
• The item received was not as described
• The recurring charge was not canceled as requested
• The charge was duplicated, or the product/service was paid for by other means

The above constitute reasons for a commercial dispute, where the customer approved the charge but is not happy with the service provided or goods received. If the cardholder did not authorize the charge (for instance, because the card was lost or stolen), then it is called a fraud dispute for the following reason:

• Charge was fraudulent

This is one of the most common reasons for disputes.

Cardholders often initiate disputes. However, when it comes to lost or stolen cards, the bank may automatically file a dispute on behalf of the cardholder.

Responsibilities

Fraud Monitoring and Control

Every charge processed by Omise is assessed, controlled, and monitored.

• Onboarding: Where fraud is more likely, for example, if you are selling items that can be resold easily, we require cardholder authentication (3DS) for all charges.
• Pre-authorization: To ensure the customer has the card, we authenticate the card number using the card's CVV value and billing address, if available. For US, UK, or Canadian cards, this uses the Address Verification System (AVS).
• Tokenization: We tokenize credit cards to reduce the risk of credit card numbers being disclosed, which could amplify fraud.
• In-Transaction Risk Analysis: Omise analyzes multiple factors for all charges to determine if they are likely fraudulent. Depending on the analysis, this could block the charge or dynamically require 3DS. Charges blocked this way will show the error code failed_fraud_check. The solutions include:
  • Velocity check of charges from the same card. We prevent using the same card for payment many times in a row, as criminals often do this to empty an account of a stolen card.
  • Velocity check of charges from the same IP or the same IP geolocation
  • Higher or lower than expected charge amounts
  • Risk scores based on transaction behavior analysis
• Transaction Review: Omise employs additional measures to detect potential fraudulent charges after they are captured to improve risk controls and thresholds or block specific abusive cards or customers from using Omise. These measures include failure pattern detection and anomaly detection. Settings and thresholds vary from merchant to merchant and are set at the discretion of Omise. Settings are monitored and regularly updated.