Cancelled Recurring Transaction, Condition 13.2

Your card processor has notified you that a cardholder is disputing a transaction that you processed.

A recurring transaction¹ was processed after it was cancelled or that the cardholder's account was closed² .

¹ Includes installment for Europe region

² Includes facilities withdrawn or deceased cardholder for Europe region

There are several common causes for this type of dispute such as follows:

The cardholder:

Withdrew permission to charge the account.
Cancelled payment of a membership fee.
Cancelled the card account.

The cardholder's bank:

Cancelled the card account.

You:

Received notice that the cardholder’s account was closed before the transaction was processed.

Transaction was cancelled, but services were used.

If the customer claimed they were billed after the services were cancelled, supply proof that the bill in question covered services used by the customer between the date of the customer's prior billing statement and the date the customer cancelled.

The cardholder cancelled the service and you have not issued a credit.

Accept the dispute.

You have already processed a credit or reversal for the transaction.

Provide documentation of the credit or reversal; include the amount and the date it was processed.

The cardholder no longer disputes the transaction.

Provide a letter or email from the cardholder stating that they no longer dispute the transaction.

How to avoid this dispute in the future

Train your sales and customer service staff on the proper procedures for processing recurring transactions, as these transactions are particularly susceptible to cardholder disputes.
Always respond in a timely manner to customer requests relating to the renewal or cancellation of recurring transactions. Check customer logs daily for cancellation or non-renewal requests; take appropriate action to comply with them in a timely manner.
Send a notification to the customer stating that his or her recurring payment account has been closed. If any amount is owed for services up to the date of cancellation, seek another form of payment if necessary.

For more information, please see Dispute Management Guidelines for Visa Merchants.

Acquirer's approach or timelines may be different and you should adhere with your current Acquirer's process. Not all disputes apply to every country/region, please check with your acquirer for further information.