Fraud and Dispute Monitoring Programs

Learn about the monitoring programs operated by the card networks.

Overview

The card schemes such as Visa and Mastercard monitor your fraud and dispute activity monthly, comparing it to your sales activity. If the number of fraud, or disputes (also known as chargebacks) received exceeds the levels deemed acceptable by the schemes, you may be placed on their monitoring programs.

Once you’re placed into a program, the scheme can charge monthly fines and additional fees, until you reduce the fraud and dispute activity back down to acceptable levels.


Visa Monitoring Programs

The Visa Fraud Monitoring Program (VFMP) and Visa Dispute Monitoring Program (VDMP) are merchant-level based monitoring programs used to identify merchants with excessive fraud and dispute activity and implement corrective plans to protect the integrity of the payment system.

VFMP thresholds, timelines, and fines

VFMP has four program timelines – Standard, Excessive, High Risk and Early Warning.

Standard

Applies if you are a non-High Risk Merchant Category Code (MCC) and meet or exceed both Standard fraud amount thresholds.

Thresholds

Reported FraudFraud-to-sales amount ration
$75,0000.90%

Timeline, fines, and fees - above the VFMP Standard thresholds

1 Month2-4 Months5-6 Months7-9 Months10-11 Months12+ Months
Notification: No finesWorkout: No finesEnforcement: $25,000 and 10.5 Dispute LiabilityEnforcement: $50,000 and 10.5 Dispute LiabilityEnforcement: $75,000 and 10.5 Dispute LiabilityEnforcement: $75,000 and 10.5 Dispute Liability. Eligible to be disqualified

Excessive

Applies if you meet or exceed both the Excessive fraud amount thresholds.

Thresholds

Reported FraudFraud-to-sales amount ration
$250,0001.80%

Timeline, fines, and fees - above the VFMP Standard thresholds

Months 1-3Months 4-6Months 7-9Months 10-11Months 12+
Enforcement: $10,000 and 10.5 Dispute LiabilityEnforcement: $25,000 and 10.5 Dispute LiabilityEnforcement: $50,000 and 10.5 Dispute LiabilityEnforcement: $75,000 and 10.5 Dispute LiabilityEnforcement: $75,000 and 10.5 Dispute Liability. Eligible to be disqualified.

High risk

Applies if you are:

  • Categorised by a High Risk MCC as defined in the Visa Rules.
  • Moved from the Standard timeline to the High Risk timeline, based on Visa’s determination that you harm the goodwill of the Visa Payment System.

Timeline, fines, and fees - above the VFMP Standard thresholds

Months 1-3Months 4-6Months 7-9Months 10-11Months 12+
Enforcement: $10,000 and 10.5 Dispute LiabilityEnforcement: $25,000 and 10.5 Dispute LiabilityEnforcement: $50,000 and 10.5 Dispute LiabilityEnforcement: $75,000 and 10.5 Dispute LiabilityEnforcement: $75,000 and 10.5 Dispute Liability. Eligible to be disqualified.

Early Warning

Applies if you have not breached the VFMP Standard thresholds, but have exceeded both of the Early Warning thresholds.

Thresholds

Reported FraudFraud-to-sales amount ration
$50,0000.65%

There are no fines or additional fees for receiving an early warning.


VDMP thresholds, timelines, and fines

VDMP has four program timelines – Standard, Excessive, High Risk and Early Warning

Standard

Applies if you are non-High Risk Merchant Category Code (MCC) and meet or exceed both of the Standard dispute thresholds.

Thresholds

Number of DisputesDisputes-to-Sales Ratio
1000.90%

Timeline, fines, and fees - above the VFMP Standard thresholds

Months 1Months 2-4Months 5-9Months 10-11Months 12+
Notification: No FinesWorkout: No FinesEnforcement: $50 per disputeEnforcement: $50 per dispute and $25,000 review feeEnforcement: $50 per dispute and $25,000 review fee. Eligible for disqualification

Excessive

Applies if you meet or exceed both of the Excessive dispute thresholds.

Number of DisputesDisputes-to-Sales Ratio
10001.80%

Timeline, fines, and fees - above the VFMP Standard thresholds

Months 1-6Months 7-11Months 12+
Enforcement: $50 per disputeWorkout: $50 per dispute and $25,000 review feeEnforcement: $50 per dispute and $25,000 review fee. Eligible for disqualification

High Risk

Applies if you are:

  • Categorised by a High Risk MCC as defined in the Visa Rules
  • Moved from the Standard timeline to the High Risk timeline, based on Visa’s determination that you harm the goodwill of the Visa Payment System.

Timeline, fines, and fees - above the VFMP Standard thresholds

Months 1-6Months 7-11Months 12+
Enforcement: $50 per disputeWorkout: $50 per dispute and $25,000 review feeEnforcement: $50 per dispute and $25,000 review fee. Eligible for disqualification

Early Warning

Applies if you have not breached the VFMP Standard thresholds, but have exceeded both of the Early Warning thresholds.

Number of DisputesDisputes-to-Sales Ratio
750.65%

There are no fines or additional fees for receiving an early warning.


Mastercard’s Monitoring Programs

Mastercard's Acquirer Chargeback Monitoring Program

Mastercard's Acquirer Chargeback Monitoring Program (ACMP) consists of two programs, the Excessive Chargeback Program (ECP) and the Excessive Fraud Merchant (EFM) program.

Excessive Fraud Merchant (EFM)

The EFM program monitors and identifies merchants with excessive fraud activity. The goal is to reduce fraud on e-commerce transactions and to create a more secure ecosystem.

Thresholds

You will be placed in the EFM program if, in the previous calendar month, you met all the following conditions:

  • You processed 1,000 or more Mastercard sales transactions in the previous month.
  • You were subject to at least 50,000 USD or EUR or more in Mastercard fraud-related chargebacks with reason codes 4837 (No Cardholder Authorisation).
  • Your fraud chargebacks-to-sales ratio is 0.5% or more.
  • Your percentage of monthly clearing volume processed using 3DS (including Data Only transactions) or DSRP (Digital Secure Remote Payment) is less than 10% in non-regulated countries, or less than 50% in regulated countries.

Non-compliance for both EFM and ECM in the same month

If you are identified as non-compliant for both EFM and ECM in the same month will only be subject to the applicable EFM assessments. If you have been identified in either the ECM or EFM for 12 months, the highest of the program assessments (whether ECM or EFM) will apply.

EFM thresholds and fines

Once you're placed in the EFM program, you will be charged monthly violation assessment fines from the second month of non-compliance. These fines are on top of any existing fees applied for fraudulent transactions and fraud-related disputes.

Number of months above EFM thresholdsViolation assessment fines
1€/$ 0
2€/$ 500
3€/$ 1,000
4-6€/$ 5,000
7-11€/$ 25,000
12-18€/$ 50,000
19+€/$ 100,000

Excessive Chargeback Program (ECP)

The ECP program has two levels, Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM).

ECP thresholds and fines

Thresholds

Number of months above ECP thresholdsFines
1€/$ 0
2€/$ 1,000
3€/$ 1,000
4-6€/$ 5,000
7-11€/$ 25,000
12-18€/$ 50,000
19+€/$ 100,000

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Note

If you need help or have any questions about the fraud and dispute monitoring programmes, contact our Support team at [email protected].)