12.7 – Invalid Data

DESCRIPTION

Why did I receive a chargeback with reason code 12.7?

You received this chargeback because one of two data issues happened. Either you obtained authorisation with invalid or incorrect data, or the MCC provided during authorisation doesn’t match the MCC provided during clearing.

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CLASSIFICATION

How does Visa classify this type of dispute?

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

Reason codes that start with 12 relate to processing errors.

ISSUER TIME LIMIT

How long can the issuer wait to file a chargeback with reason code 12.7?

The maximum amount of time that can pass between the transaction processing date and the dispute processing date is 75 calendar days.

VALIDITY

What would make a 12.7 chargeback invalid?

An issuer is not allowed to use reason code 12.7 if either of the following characteristics are applicable:

• The transaction was a mobile push payment.
• The transaction was an ATM cash disbursement.

SUPPORTING DOCUMENTS

Can I fight a reason code 12.7 chargeback?

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

• 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 refunded one of the transactions before the chargeback was filed.
• Evidence that the cardholder no longer disputes the transaction.
• Evidence that the authorisation request did not contain invalid data.

WORKFLOW

What process do I use to respond to a chargeback with reason code 12.7?

Processing error chargebacks — including Visa reason code 12.7 — are managed with the collaboration workflow.

If you want to respond to a 12.7 chargeback, collect the supporting documents outlined above. Then, write a rebuttal letter to explain your case. Submit the entire package to your acquirer for review.

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 timeline applies to acquirers. Because the acquirer has tasks to complete before sending you the chargeback notice and after receiving your response, the amount of time allocated to you is much shorter. Merchants usually have 3-20 days to respond to a chargeback. Check the due date on your chargeback notice for your specific time limit.

ADVANCING THE CASE

Can the issuer file pre-arbitration after a 12.7 dispute response?

Yes. Issuers can file pre-arbitration for any collaboration dispute — including disputes with a 12.7 reason code.

During the pre-arbitration phase of the dispute process, the issuer can address the information or evidence you provided in your dispute response. Any of the following situations can prompt pre-arbitration.

• The issuer can provide new documents or information about the original dispute.
• In response to the documents or information you provided, the issuer changes the reason code. (The issuer can only change the reason code if the original chargeback was valid.)
• If your dispute response states that the cardholder discussed the issuer with you and no longer wants to dispute the transaction, the issuer must provide evidence that the cardholder does, in fact, want to advance 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 a difference in the exchange rate, the issuer can advance the case to pre-arbitration to recoup the losses.

PREVENT

How can I avoid chargebacks like this in the future?

Here are some suggestions on how to avoid this type of chargeback.

• Always request authorisation.
• Supply all necessary information with each authorisation request, including transaction date, MCC, transaction type indicator, country code, and state code.
• Make sure your correct MCC is used in the authorisation request and it matches what will be sent with transaction clearing.

Visit our detailed guide to learn more about chargeback prevention.