12.4 – Incorrect Account Number

DESCRIPTION

Why did I receive a chargeback with reason code 12.4?

You received this chargeback because you processed a transaction, refund, or ATM deposit adjustment with an incorrect account number.

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CLASSIFICATION

How does Visa classify this type of dispute?

Visa divides its reason codes into four categories: fraud, authorisation errors, processing errors, and consumer disputes.

Reason codes that start with 12 are classified as processing errors.

ISSUER TIME LIMIT

What is the time limit for a chargeback with reason code 12.4?

The chargeback must be filed within 120 days of either the transaction processing date or the date of the ATM deposit adjustment.

VALIDITY

What would make a 12.4 chargeback invalid?

An issuer is not allowed to use Visa reason code 12.4 in the following situations.

• The transaction was an ATM cash disbursement.
• The transaction used straight-through processing.
• The transaction was processed using an account number that doesn’t exist but authorisation was obtained.
• The transaction was chip-initiated and contained a valid cryptogram.
• The transaction was a mobile push payment.

SUPPORTING DOCUMENTS

Can I fight a chargeback with reason code 12.4?

Yes. You can fight a chargeback with this reason code as long as you have at least one of the following:

• Evidence that the chargeback is invalid. (Note: Your acquirer’s technology should catch these errors and automatically respond on your behalf. If your acquirer doesn’t automatically respond and you receive a chargeback notice, you can challenge the chargeback yourself.)
• Evidence that you credited the cardholder’s account before the chargeback was filed.
• Evidence that proves the cardholder no longer wishes to dispute the transaction.
• A transaction receipt or another document that proves the correct payment credential was used.

WORKFLOW

Does reason code 12.4 use the allocation or collaboration workflow?

Visa reason code 12.4 is managed with the collaboration workflow.

If you want to respond to a chargeback with this reason code, submit a dispute response package that contains your supporting documents and a chargeback rebuttal letter.

ACQUIRER TIME LIMIT

How quickly do I need to file a chargeback response?

Your acquirer must submit your chargeback response within 30 calendar days of the chargeback filing date.

Note: This is the acquirer time limit. The amount of time you, the merchant, have to prepare and submit your response will be much less. Usually, merchant time limits are about 3-20 days. Make sure you know how much time your acquirer allows.

ADVANCING THE CASE

Can the issuer file pre-arbitration after a 12.4 dispute response?

Yes. An issuer can file pre-arbitration for any collaboration dispute — including disputes with reason code 12.4.

Pre-arbitration allows the issuer to address information or evidence provided in your dispute response.

After receiving a collaboration dispute response, the issuer can make a pre-arbitration attempt for any of the following reasons.

• The issuer can provide new documents or information about the original dispute.
• The issuer changes the reason code because of information or documents provided in the dispute response. (The issuer can only change the reason code if the original chargeback was valid.)
• If your dispute response included a claim that the cardholder no longer wants to dispute the transaction, the issuer must prove that the cardholder does, in fact, want to continue the dispute.
• If you provided the required supporting documents and disputed the cardholder’s claim, the issuer must review the evidence with the cardholder and provide an explanation of why the cardholder continues to dispute the transaction.
• If you refunded the cardholder after the chargeback was filed, but the issuer suffered a financial loss because of the exchange rate, the issuer can advance the case to pre-arbitration.

PREVENT

How can I avoid chargebacks like this in the future?

Here are steps you can take to avoid chargebacks with reason code 12.4.

• Always request authorisation before completing a transaction.
• If an authorisation request is denied, stop the transaction and ask for an alternate form of payment.
• Make sure the customer taps or dips the card—only use fall-back options in emergency situations.

To learn more about building a chargeback prevention strategy, visit our detailed guide.