Visa Chargeback Reason Code 13.5: Misrepresentation

What is Visa Chargeback Reason Code 13.5?

The Visa chargeback reason code 13.5 occurs when there is a misrepresentation claim in the terms of sales. It falls under consumer disputes. Although similar to reason code 13.3 for “not as described” merchandise, it may carry more weight than that.

We understand the need to be convincing to land sales. Sometimes, merchants can be carried away in persuading customers that they blow things out of proportion. That could result in claims of misrepresentation by the cardholder, resulting in chargebacks under this code.

Misrepresentation occurs in material facts that should aid the consumer in evaluating and interpreting the terms of sales. A simple misrepresentation could be putting out a few positive reviews while ignoring the growing customer dissatisfaction. Another example would be blowing metrics out of proportion to convince the cardholder to purchase.

This dispute can arise from verbal and written communication between you and the cardholder. Misrepresentation can be any of the following:

• Innocent misrepresentation
• Negligent misrepresentation
• Fraudulent misrepresentation

Innocent misrepresentations can slip through occasionally, and some may get through without causing chargebacks. Negligent misrepresentation is where things get risky. An example is selling a used car and telling the buyer that the previous owner changed the oil, when that’s not true. This negligence can lead to court cases if the merchandise causes damage to the cardholder.

Fraudulent misrepresentation involves intentionally falsifying information to persuade the buyer. Examples include falsifying accounting records, forging receipts, etc. Regulators and enforcement frown on fraudulent misrepresentation. Even with the chargebacks, merchants that do this can come under serious charges.

Cardholders can also make false claims or fail to ultimately evaluate the information you gave them. Hence, chargebacks under this code are best approached with caution. We’ll explain the specific causes and ways to fight them.

Why Did It Happen?

Chargebacks under this code occur when cardholders claim merchants misrepresented information during sales. This is often related to the terms of sales.

Visa outlines a few transactions where misrepresentation could cause chargebacks under this code. They include the following:

• Reselling timeshare
• Consolidating debt for a cardholder
• Credit repair or counseling
• Technical support or services
• Mortgage repair, counseling, or modification
• Business opportunities with potential income
• Foreclosure relief services
• Investment products where the merchant blocks cardholders from withdrawing their balance: an example is binary trading

Chargebacks under this reason code are not limited to physical products. The sale of intangible products and services can also cause them. Promising things the product or service cannot do will cause cardholders to file disputes.

The issuer will process the chargeback when there is a clear case of misrepresentation. That is when the cardholder has proven beyond a reasonable doubt that the product or service has failed to deliver as the merchant promised. Sometimes, there will be a replacement request.

Delaying a replacement request can also cause cardholders to file disputes with the issuer. However, some cardholders can go straight to their issuers. They can falsely claim to receive misrepresented information to keep the product and still receive a chargeback.

Some cardholders can have unreasonable expectations about a product or service. That can also cause disputes that cause chargebacks under this reason code. So, you may present the correct information about your merchandise and still receive this chargeback.

All hope is not lost if you have incurred this chargeback. Visa allows merchants to fight it if they feel wronged. We’ll go over each approach, as it depends on specific criteria. 

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How to Fight Visa Chargeback Reason Code 13.5: Misrepresentation

We recommend keeping records when giving cardholders information to convince them to purchase your merchandise or service. You’ll need these records to plead your case and reverse the chargeback. Use written communication as much as possible.

With that in mind, the following are our suggested ways to fight chargebacks under reason code 13.5:

• If the information was well represented: Provide documents to show that the information in the terms of sales was well represented. For investments, provide evidence that the cardholder has no funds to withdraw.
• If the dispute concerns the quality of the product: Prove that the dispute relates to the quality of the product and not misrepresentation. That will invalidate the chargeback and cause a reversal.
• If the dispute relates to a cash back portion of the deal: The cashback portion is not a case of misrepresentation. Hence, prove that the dispute does not concern the main agreement to invalidate and reverse the chargeback.
• If you have resolved the dispute with the cardholder: Provide evidence that shows a satisfactory resolution between you and the cardholder. You can add documents that show the cardholder’s adequate response.
• If the cardholder has withdrawn the claims: Sometimes, cardholders may overstep to claim a cashback. Obtain proof from the cardholder of their withdrawal and inform your acquirer.

Do your homework before fighting this chargeback. Ensure you have not misrepresented the terms of sales or investment information. If you have, accept the chargeback and plug the loopholes.

Speaking of loopholes, we have a few tips on preventing chargebacks under this reason code. Check the next section for our recommendations.

How to Prevent Visa Chargeback Reason Code 13.5: Misrepresentation

The following are our recommendations for preventing chargebacks under reason code 13.5:

• Ensure you have an accurate description of your merchandise or services. This covers advertisements on billboards or digital platforms, transaction receipts, telephone orders, etc.
• Fact-check your product and service description.
• Use clear language to communicate your terms of service and sales information. Ensure the cardholder agrees to them before purchasing.
• Attend promptly to customer complaints and maintain excellent customer service.
• Address replacement requests quickly.
• Process refunds quickly if you’ve agreed to a refund with the cardholder.
• Visa has rules for introductory offers, free trials, and upselling. Ensure that you comply with them.
• Return policies do not relate to chargebacks under this code. However, having a good return policy can prevent cardholders from filing disputes with their issuers immediately. Ensure your return policy is clearly stated and visible to the cardholder.

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