First party fraud is a concern for all parties in the payment system. This occurs when a cardholder seeks reimbursement or a credit for purchased goods and services, resulting in potential disputes and creating additional costs for all participants.
Effective April 2020, the Visa rules will be updated regarding first party fraud:
- Card-not-present (CNP) subscription merchants are required to deploy daily cardholder velocity controls.
- CNP subscription merchants are required to black list cardholders they believe are abusers of first party fraud
- CNP subscription merchants are required to provide contact details in the merchant location field of the authorization message. Failure to supply this data on the authorization message could result in fines.