When a customer makes a fraud claim, their card-issuing bank generates a TC40 data claim. This claim is sent to your acquirer, any other issuing banks, and credit card brands including Visa and MasterCard.
You are not initially notified of this TC40 data claim.
The TC40 data claim report includes:
- Merchant details.
- Bank details for those involved in the transaction.
- Transaction details such as when and where it occurred.
Visa collects this TC40 data as part of its Risk Identification Service (RIS), and for MasterCard this data is part of the System to Avoid Fraud Effectively (SAFE) report.
While this data is not easy to access, for a merchant it can be used to help strengthen your chargeback prevention strategy. Also, it’s important to understand that a TC40 data claim is not the same as a chargeback.
A TC40 data claim is typically released within days of an initial fraud report, but these claims do not stop the chargeback from being filed. Because of this, you cannot rely on just TC40 data to defend yourself against chargebacks.
How do I use TC40 data?
TC40 data is a good tool for you to use when trying to improve your internal fraud prevention measures, but it is often misused by merchants as a proactive way to prevent chargebacks.
Remember that these TC40 data claim reports are only made available to merchants at the discretion of the acquirer or processor. In addition, because these files are typically very large, many processors cannot provide you with this report on a consistent basis.
This TC40 data is used by issuers to evaluate your overall fraud risk. As a merchant, you can use this data to evaluate your overall fraud prevention and risk management strategy and then take steps to improve it.
Admittedly, because this file contains more than chargeback details, the information in a TC40 can be limiting in how it helps you to prevent chargebacks. A detail often overlooked by many merchants is that these TC40 data claims are only reflections of claims by cardholders of fraud and not friendly fraud or disputes that occur because of customer dissatisfaction.
Relying on a service that offers you chargeback alerts based on TC40 data will only end up costing you money, time, and stress – as well as unnecessary over-refunding on transactions that don’t end up becoming chargebacks. (Contact us to learn about CDRN and how it can work for you to limit chargebacks.)
A TC40 data claim is simply a report of fraud. Although it does include useful information, this information is not enough to prevent chargebacks or to represent chargeback claims. The chargeback process may still be initiated after a TC40 data claim, so it’s important that you’re not using this data as your first-line of defense.
What is the alternative to relying on TC40 data?
All too often merchants are using an open-loop system, and this results in more headaches for you and often unnecessary costs and business impacts.
Rather than relying on TC40 data to prevent chargebacks—though chargebacks can’t be prevented with TC40 data claims—we recommend that you consider the advantages of using a closed-loop system. With a closed-loop system such as CDRN, you are connected directly to the issuer, ensuring that dispute data is automatically routed to you for resolution. This stops the chargeback process and gives you up to 72 hours to review the dispute so you can take the necessary action.
As a reminder, an open-loop process that relies on TC40 data does not stop the chargeback process. Rather, the chargeback dispute process continues in tandem with the alert being filed, and typically a response is required within 24 hours.
A closed-loop system alerts you to the cardholder dispute in near real-time so you can resolve the issue directly with the issuer—by processing a refund or credit—to stop the dispute from escalating to a chargeback, and it allows you to avoid expensive fines, fees, and penalties.
How can I learn more about TC40 data?
The best thing you can do is contact us. Our team of experts will answer your questions about TC40 data and provide you with recommendations on improving your chargeback process. We recommend you learn about CDRN and the benefits of a closed-loop system in protecting your business from chargebacks.