jpmorgan commercial card solutionsconsumer credit and commercial card. ... investigator will issue...
TRANSCRIPT
JPMorgan JPMorgan
Commercial Card SolutionsCommercial Card SolutionsCommercial Card SolutionsCommercial Card Solutions
Arizona State University d d iFraud and Disputes
Transfers, Credits and ChargebacksMarch 12, 2009March 12, 2009
Patricia Larkin Green
VP, Relationship Manager
J.P.Morgan, Wholesale Card & Procurement Services
AGENDAAGENDA
Definition of Fraud and DisputeDefinition of Fraud and Dispute
Fraud Detection and Prevention
Fraud Investigations and Recovery
Transfers Credits and ChargebacksTransfers, Credits and Chargebacks
Minimize Your Risk; Best Practices
Disputes
Q estions/Disc ssion
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Questions/Discussion
Fraud and Disputes DefinedFraud and Disputes Defined
Fraud
Fraud is defined as unauthorized transaction(s) made with a lost, stolen, compromised or counterfeit card/number
Lost/Stolen Recoverability varies depending on circumstancesLost/Stolen- Recoverability varies depending on circumstances
A h t t ti bill d t dh ld ’ t t tDispute
A merchant transaction billed to a cardholder’s statement.
Lost/Stolen- Recoverability varies depending on circumstances
Single unauthorized / does not recognize transactionsSingle unauthorized / does not recognize transactionsMerchant Billing ErrorsProcessing ErrorsCardholder Dispute
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Types of FraudTypes of Fraud
LostLost
Stolen
Non-receipt
Internet
Counterfeit/skimming
Stolen/compromised number
Account takeover/true name fraud
5
Evolving History of FraudEvolving History of Fraud
$120
Counterfeit fraud was the fastest growing fraud type in 2005Counterfeit fraud was the fastest growing fraud type in 2005
$80
$100
Card Not
$60
$80 Not Present
$20
$40Lost
Counterfeit
Stolen
NRI
3Q96 3Q97 3Q98 3Q99 3Q00 3Q01 3Q02 3Q03
$0Acct Takeover
Fraud Apps
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3Q02 3Q03 3Q04 3Q05Credit and Debit Card
Fraud by Type 4Q06 Fraud by Type 4Q06 –– 3Q073Q07
$15
Counterfeit and Card Not Present Fraud are the fastest growing fraud type todayCounterfeit and Card Not Present Fraud are the fastest growing fraud type today
$10
$13 Card Not
Present
$5
$8
$
Counterfeit
$3
$5
Acct TakeoverSt l
Lost
NRI
SeptJan
MaySept
$0Acct Takeover
MiscStolen
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pConsumer Credit and
Commercial Card
Fraud TypesFraud Types
Fraud types change and continue to evolve
Lost/Stolen- Recoverability varies depending on circumstancesLost/Stolen- Recoverability varies depending on circumstances
NRI- Non-receipt
Card Not Present- Mail Order Telephone Order/Internet- Recoverability is Card Not Present- Mail Order Telephone Order/Internet- Recoverability is very good
Counterfeit- Card present- Recovery through chargeback process not likely
Account takeover-true name fraud
*Bolded items are the greatest drivers for JPMC Commercial Card fraud.
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What is JPMC Doing for You?What is JPMC Doing for You?
1. Unique designed credit card
HologramHologram
Tamper-evident signature panel
Unique Magnetic strip encoding
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What is JPMC Doing for You?What is JPMC Doing for You?
2. Partner with Visa
E-mail alerts are generated from Visa notifying of account number compromiseE mail alerts are generated from Visa notifying of account number compromise
JPMC security representatives review accounts and make proper contact with cardholders or administrators based on information obtained from Visa alerts
JPMC security representatives contacts appropriate agency – FBI, Secret Service, or other law enforcement agencies with pertinent fraud information based on requirements within the Visa alert
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What is JPMC Doing for You?What is JPMC Doing for You?
3. Cardholder and client awareness
JPMC works with program administrators to develop proper card control (i e JPMC works with program administrators to develop proper card control (i.e.. MCC codes, credit limits, purchase velocity limits, etc) to reduce risk
Participate at conferences and forums to educate cardholders and clients on current trends and fraud prevention current trends and fraud prevention
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What is JPMC Doing for You?What is JPMC Doing for You?
4. Fraud detection systems
Fraud detection systems are flexible and are used that provides the ability to target both general fraud trends as well as specific trends
Criteria/rules are defined based on analysis of fraud data providing us with current fraud trends
Fraud patterns
Specific MCC
Dollar amounts
Geographic location
Specific merchantsSpecific merchants
When authorizations meet these pre-defined criteria, the account is sent to queue
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What is JPMC Doing for You?What is JPMC Doing for You?
4. Fraud detection systems (cont)
JPMC security representatives analyze account and determine if contact with JPMC security representatives analyze account and determine if contact with cardholder and/or program administrator is needed
Merchant referral status put on account if appropriate
5. Validate your identity when you call JPMC
E h dh ld id d i i f id tifi ti th t lid t Each cardholder was provided a unique piece of identification that validates your identity
Employee ID, SSN, or other unique information that would have been communicated to you by your Program Administratorcommunicated to you by your Program Administrator
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Fraud Department StructureFraud Department Structure
Fraud Investigations and Recovery
Partner with Program Coordinators on potential misuse in escalation to Program Partner with Program Coordinators on potential misuse in escalation to Program Administrators.
Initiate recommendations to Clients on strategic opportunities related to improved authorization controlsauthorization controls.
Open Fraud Cases
Fraud Report to the Associations
Send Affidavit
Request and initiate chargeback for recoveries via Association regulations
Investigate High Risk Merchant Category Codes to identify potential suspectvest gate g s Me c a t Catego y Codes to de t y pote t al suspect
Analyze for account history for potential point of compromise
Work with various law enforcement agencies
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Fraud Chargeback ProcessFraud Chargeback ProcessJPMC puts temporary credit on account
Orders copy of sales draft-30 days
Affidavit sent and customer to return within 30 days
SALE
Customer calls to report fraud
Representment of charge to merchant
Merchant can dispute-45 days
If merchant contests, case in arbitration with Visa-30 days
Settlement of decision by VisaSettlement of decision by Visa
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Second representment of charge to merchant-30 days
Fraud Department StructureFraud Department StructureFraud Investigations and Recovery
Recovery Investigations
When the Fraud case is opened the unauthorized transaction(s) is moved off of the new account by issuing credit with a description of “XFRD Merchant Name” along with the amount of the transaction(s) “$” to the old account number that was closed (lost/stolen)( )
Transact Post Employee Last Employee First
Transaction Departm Account Merchan
Trans ID ion Date Date Namep y
Name Merchant Name Amountp
ent Number Orig Merchant Name t ID
886202 5/9/2008 5/9/2008 LUDWIG NATHANIEL XFRD/STAPLES/5557 -$627.17 2406************9866 XFRD/STAPLES/5557 78856
886201 5/9/2008 5/9/2008 LUDWIG NATHANIEL XFRD/SPORTS CHALET/5557 -$214.87 2406************9866 XFRD/SPORTS CHALET/5557 78854
886200 5/9/2008 5/9/2008 LUDWIG NATHANIEL XFRD/STAPLES/9866 $627 17 2406************5557 XFRD/STAPLES/9866 78857886200 5/9/2008 5/9/2008 LUDWIG NATHANIEL XFRD/STAPLES/9866 $627.17 2406 57 XFRD/STAPLES/9866 78857
886199 5/9/2008 5/9/2008 LUDWIG NATHANIEL XFRD/SPORTS CHALET/9866 $214.87 2406************5557 XFRD/SPORTS CHALET/9866 78855
884341 5/5/2008 5/7/2008 LUDWIG NATHANIEL STAPLES 00107151 $627.17 2406************5557 STAPLES 00107151 60659
883952 5/5/2008 5/6/2008 LUDWIG NATHANIEL SPORT CHALET 00000620 $214.87 2406************5557 SPORT CHALET 00000620 78699
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Fraud Department StructureFraud Department StructureFraud Investigations and RecoveryFraud Investigations and Recovery
Fraud case opened and the unauthorized transaction(s) is moved off of the new account by issuing credit with a description of “XFRD Merchant Name” along with the amount of the transaction(s) “$” to the old account number that was closed ( ) $(lost/stolen)
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Fraud Department StructureFraud Department StructureFraud Investigations and RecoveryFraud Investigations and Recovery
A debit with a description of “XFRD Merchant Name” along with the amount of the transaction(s) “$”
Note if viewing via PaymentNet both the old or closed (lost/stolen) account and the new account number transactional activity is displayed
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Fraud Department StructureFraud Department Structure
Fraud Investigations and RecoveryContinued:
Recovery Investigations
Upon receipt of the signed affidavit the Recovery Investigator will initiate request to the merchant(s) to obtain documentation on the fraud transaction(s) request to the merchant(s) to obtain documentation on the fraud transaction(s) (This process takes approximately 45-90 days)
If JPMorgan Chase recovers the loss via the Association Regulations the Recovery Investigator will issue credit(s) for the fraud dollars to the old (lost/stolen) account to offset the initial debit that was placed on the old account when the case was initially opened.
The credits you then see are the final, permanent credits for the fraud that occurred occurred.
If we didn't issue those fraud chargeback credits, then the fraud balance would be sitting on the old account indefinitely and we want to avoid that.
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Minimize RiskMinimize Risk--Your RoleYour Role
1. Protect your credit cardsKnow where your credit card is at all times
Anticipate on receiving a new card just prior to expiration of your current card
Be aware of when your statements should arrive
If l t t t dit d If late, contact your credit card company
Sign the back of your card immediately upon arrival-even prior to activation
Keep record of your credit card number in a secure place, separate from your Keep record of your credit card number in a secure place, separate from your card. Include in that record the toll free number for JPMC
Always get your credit card back promptly from salesclerk, waiter, etc.
Review your statements closely
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Minimize RiskMinimize Risk--Your RoleYour Role
2. Guard your credit card numberDo not give your credit card number over the phone unless you know you are dealing with a reputable companydealing with a reputable company
If you have ATM cash access, memorize your PIN number and do not keep it with your credit card
Never give out information in an email; your card provider will not ask you to provide personal information such as your password, social security number, bank account and credit card numbers
Be aware of phishing by phone and mail as well
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Minimize RiskMinimize Risk--Your RoleYour Role3. Safety tips when using your credit card
Destroy carbons and voided receipts immediately when no longer needed
Check your statement promptly against receipts that have been kept in a secure place
If you no longer need your company credit card, destroy it immediately and y g y p y , y ynotify your company’s program administrator
Safeguard this card as if it were your own; report lost or stolen cards immediatelyy
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Minimize RiskMinimize Risk--Your RoleYour Role4 R ti l d f d4. Reporting losses and fraud
If you lose your commercial card or if you realize it has been lost or stolen, immediately call JPMC toll free number (800) 270-7760
JPMC’ it t ti ill fi t ti ti it ith t JPMC’s security representatives will confirm transaction activity with you to ensure that no fraudulent activity has occurred
Your card will be terminated immediately and you will be sent a replacementreplacement
If you suspect fraudulent activity on your account, immediately call JPMC at (800) 270-7760. Your card will be terminated immediately and you will be sent a replacementa replacement
You may be asked to sign an affidavit stating that you did not make the purchase(s) in question
JPMC’ S it D t t ill i iti t i ti ti d ff tJPMC’s Security Department will initiate investigations and recovery efforts
Make sure your credit card companies have your updated contact information
We are required to follow Visa’s requirements when disputing fraud charges
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We are required to follow Visa s requirements when disputing fraud charges
Since fraud charges are different from disputed charges, fraud charges are not to be disputed via PaymentNet
What Do I Do to File a Dispute?What Do I Do to File a Dispute?Step 1:
Contact the merchant
Most situations can be easily resolved with the merchant
Step 2:File through PaymentNetg y
You will receive a confirmation email immediately upon clicking the submit button
Dispute is automatically routed to Dispute Department for processing and Dispute is automatically routed to Dispute Department for processing and will let you know if you need additional documentation
Another email will be generated once the dispute is resolved
Can send via fax or mail
Notification must be received within 60 days from the statement cycle date that the disputed charge appears
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Documentation NeededDocumentation Needed
Dispute ReasonAdditional Documentation Needed
I have been billed for an Copy of receipt that shows correct incorrect amount
Merchant was to issue credit for merchandise returned to
Copy of receipt that shows correct amount
Copy of credit receipt received at store
the store
I have been charged for a purchase that was paid for by
store
Copy of documentation showing the other method of payment: cash receipt, copy of check, copy of other
other means
Merchandise/Service received damaged or not as described
receipt, copy of check, copy of other credit card statement, etc
Copy of returned mail receipt from returning the merchandisereturning the merchandise
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Typical Dispute Chargeback ProcessTypical Dispute Chargeback ProcessJPMC puts into dispute status
Orders copy of sales draft-30 days
If not resolved, customer files a dispute within 60 days of the billing date cycle for which the charge appears
SALE
Customer calls merchant
Representment of charge to merchant
Merchant can dispute-45 days
If merchant contests, case in arbitration with Visa-30 days
Settlement of decision by Visa
Second representment of charge
Settlement of decision by Visa
Credit would appear if ruled in CH favor
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p gto merchant-30 days
Other Important InformationOther Important InformationDispute regarding tax
Cardholder’s responsibility to provide tax exempt ID# at time of the purchase
If it was provided, the cardholder needs to detail this in their dispute notification
Third partyThird party
If travel agency is at error, must dispute with travel agency
If it is airline/hotel/etc error we can dispute chargeIf it is airline/hotel/etc error, we can dispute charge
Reoccurring chargesI i ibili l i h h ld d b It is your responsibility to cancel any reoccurring charges should your card be canceled (i.e.. Internet, cell phone, etc)
Floor limits
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Not all charges require an authorization
You can still dispute charges on a closed account
Department CardDepartment CardAccounts set up under Department or Company names do not qualify for
fraud related recoveries from Visa or MasterCard
Clients will still have other dispute rights not categorized by Visa or Clients will still have other dispute rights not categorized by Visa or MasterCard as “Fraud”. Below are examples of non-fraud related dispute clients can exercise:
ViVisa
Services Not Provided or Merchandise Not Received
Cancelled Recurring Transaction
Not as Described or Defective Merchandise
Cardholder Does Not Recognize Transaction
Incorrect Transaction Code (ie: credit posted as a debit)( p )
Incorrect Transaction Amount
Duplicate Processing
Credit Not Processed
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Credit Not Processed
Paid by Other Means
Services Not Rendered – ATM funds not received