Challenging Transaction Disputes Under Visa Compelling Evidence 3.0
In the process of running your business, you may be called upon to counteract a few different types of fraud and financial loss. While some of these include large-scale, organized third-party fraud, a surprising percentage comes in the form of first-party misuse, sometimes called friendly fraud.
Often caused by something as simple as buyer’s remorse, this type of incident involves a customer filling out a fraud claim, marking the transaction as fraudulent in the hope of receiving a quick and easy refund which results in a merchant chargeback. Over 60% of merchants have seen first-party misuse rise, and while some of these friendly fraud incidents are caused by buyers being confused by transaction descriptors on bank statements, some occur purely due to people chasing free goods.[1]
With these issues becoming concerningly common, you need a reliable and repeatable fraud claim dispute process. Fortunately, the latest set of Visa transaction dispute rules — Compelling Evidence 3.0 — supports this.
What Is Visa Compelling Evidence 3.0?
Compelling evidence rules give merchants a standardized path to fight incorrectly categorized fraud disputes. They are a useful tool in the battle against so-called friendly fraud. Fortunately, plenty of businesses are already taking advantage of these pathways.
In the past year, 80% of companies have used compelling evidence processes to dispute suspected first-party misuse, and 77% have taken advantage of updated, modernized rules to win disputes[2] Keeping up with these rules can help your company join in with this productive trend.
Visa Compelling Evidence 3.0 is Visa’s latest update to its specific rules. This version went live in April 2023 and significantly affected the way merchants dispute transactions tagged with dispute condition 10.4.[3]
Fraud condition code 10.4 is the Visa reason code used to indicate fraud of an undefined or “other” type in a card not present transaction, and before the advent of Compelling Evidence 3.0, there was guaranteed mechanism to win the dispute.[4] The updated rules in Compelling Evidence 3.0 give a clear, consistent way for merchants to prove that a transaction was intentionally initiated by the customer. In other words, it presents a framework for flagging which transactions are likely first-party misuse.
Taking full advantage of compelling evidence rules means storing and analyzing the kind of consumer information that Visa reviews to tell the difference between legitimate fraud claims and first-party abuse. You should store this information in an accessible system to make sure it is available to provide to Visa, or else merchants cannot use the Compelling Evidence 3.0 framework.[5]
If your organization can build the systems and partnerships necessary to dispute transactions through Compelling Evidence 3.0, you have gained a powerful way to push back against first-party misuse.
Challenging a Transaction Dispute Under Visa Compelling Evidence 3.0
The information needed to challenge a transaction dispute under Visa Compelling Evidence 3.0 includes evidence of two previous transactions between the company and the customer filing the claim. The data can establish a “historical footprint of previous purchase history,” essentially indicating that the person is someone who has willingly bought from the company and is not being defrauded.[6]
The two-example prior transactions should be at least 120 days old from the received chargeback’s disputed date, but less than a year, with no active fraud reports or fraud disputes. These submissions should share identifiable data such as a device fingerprint, IP address, or shipping address with the transaction now under dispute. Prior transactions that have passed that undisputed transaction threshold are assumed to be legitimate, allowing them to serve as evidence. The 120-day limit does not apply to Account Funding Transactions (AFT), which can come from any time in the 365 days prior to the dispute.
One way to provide this data to Visa in real time is when merchants use Verifi Order Insight ®.
Connecting through this system is a form of pre-dispute processing. When a dispute occurs and appears in the Visa Resolve Online (VROL) system, the necessary transaction data will be available through Verifi’s Order Insight integration. This is not the only way to provide the data, however. As a merchant, you can share the data to Visa post-dispute and before arbitration.
Engaging with Verify Order Insight is a way to deal with all kinds of transaction disputes, and is not limited to the Visa reason code 10.4 transactions covered under Compelling Evidence 3.0. In the best-case scenarios, card issuers will review the transaction records that exist between a customer and a merchant, determining in advance that a transaction dispute is not worth filing in the first place, preventing you from having to actively challenge it.
Hardening Your Business Against First-Party Misuse and Lessening Chargebacks
Filing disputes through updated compelling evidence processes is one component of an overall program to prevent first-party misuse. Being truly comprehensive in these efforts, however, means implementing platforms that can take an even broader look at the problem.
The purpose of tech-based countermeasures against first-party misuse is to save time and effort for your team. You need a quick, highly automated method of determining which disputed transaction instances are worth challenging. Without this level of automation, the commitment of time and employee effort will be excessive.
Implementing a modern chargeback management platform, one that delivers automated analytics, integration with acquirers and processors, and dispute templates, is the primary way to boost efficiency.
Managing friendly fraud disputes is something that can take your team’s time away from performing value-adding work. Connecting a tech-driven solution directly to the tools offered by Visa, Mastercard and other major card network providers puts the hours back in your people’s days, all while helping you raise your dispute win rate.
Find the Right Platform to Manage Transaction Disputes
The best time to find a new chargeback management and fraud prevention platform for your business is right now. The sooner you can adopt this system, the more challenges you can win, safeguarding your bottom line and your employees’ time.
Accertify is a leading option when you need a purpose-built platform for chargeback management. Our technology is powered by the latest machine learning algorithms to ensure maximum accuracy in selecting which disputes to challenge. Furthermore, our solutions are backed by human insight and intelligence, helping you integrate capabilities like Visa Compelling Evidence 3.0.
The perfect platform for your chargeback management needs combines the best of both worlds. Empowered by tech but designed and overseen by humans, the solution can help you stand up against increases in first-party misuse.
See how our chargeback management solutions can help your business thrive with fraud prevention and learn to move at the speed of right.
[1] Merchant Risk Council, 2025
[2] Merchant Risk Council, 2025
[3] Visa, 2023
[4] PYMNTS, 2022
[5] PYMNTS, 2022
[6] Visa, 2023