Friendly fraud might feel personal, but Visa treats it the same as any other dispute. If your chargeback count spikes, you're getting flagged, no matter what caused it. That's how merchants end up in the Visa Dispute Monitoring Program (VDMP) without realizing anything changed. But there are patterns that trigger these spikes. And if you know what to look for, you can catch them before Visa does.
What Is VDMP Visa and How It Works
The Visa Dispute Monitoring Program (VDMP) is Visa's way of tracking merchants with unusually high chargeback rates. If your dispute-to-sales ratio crosses a set threshold, currently 0.9% and at least 100 disputes per month, you're considered in breach. You get a warning month. After that, Visa starts charging fees and applies stricter monitoring.
It doesn't matter if the disputes are caused by legitimate fraud, customer confusion, or buyers who abuse your refund policy. To Visa, it's all chargeback volume.
Why Friendly Fraud Gets You Flagged Too
Many merchants assume that if the chargebacks are "friendly fraud" (for example, a customer lying to get a refund), Visa will treat that differently. They don't. VDMP is volume-based. That means even if you're doing everything by the book, a sudden spike in false claims can push you past the threshold.
Here's where it gets risky:
- You don't always see the spike coming
- The spike may be caused by something out of your control (a viral post, a TikTok refund trend, a fake Discord guide)
- Even if you refund a customer, they can still file a chargeback
Patterns That Trigger VDMP Spikes
Visa's monitoring doesn't look at just one bad month. It tracks patterns. Here are a few that often trigger a VDMP flag:
1. Sudden Surge in Volume + Chargebacks
A sale, partnership, or unexpected traffic boost can bring in new buyers—and with that, new disputes. Many of these may be first-time customers who didn't recognize the charge, or who expected a different refund policy.
2. "Refund Guide" Fraud Trends
If a guide or influencer posts how to get products for free from your store, you'll likely see a short-term spike in friendly fraud. These surges can look like true fraud to Visa.
3. Delayed Delivery or Fulfillment Issues
If a product is delayed, customers may panic and file chargebacks, even after you've shipped it. This is especially common in holiday seasons or during supply chain disruptions.
4. Auto-Renewal Complaints
Recurring billing models (especially with unclear terms or no reminders) are a magnet for disputes. Many customers skip customer service and go straight to their bank.
5. "Refund First" Support Teams
Sometimes merchants try to preempt disputes by refunding customers quickly. But if you refund after settlement and the customer still disputes, Visa still counts that chargeback.
How to Reduce Friendly Fraud Before Visa Flags You
- Use real-time alerts: Set up alerts for chargeback spikes, refund volumes, and product-specific complaints.
- Tighten billing descriptors: Confusing descriptors increase friendly fraud. Include your brand name and website.
- Require CVV and AVS: These fraud tools help you block unauthorized card use before a dispute happens.
- Track which SKUs get disputed: If a product gets more disputes than others, pause it and investigate.
- Don't rely on refunds alone: A refund doesn't block a chargeback unless it's processed quickly and before the customer contacts their bank.
- Pre-dispute solutions like Rapid Dispute Resolution (RDR): These tools can auto-refund low-risk cases before they become disputes.
The Bottom Line
Visa's monitoring doesn't care what type of fraud it is. If your dispute rate spikes, even due to friendly fraud, you're flagged. Understanding how VDMP Visa works and what causes chargeback surges can help you respond early and stay under the radar. Merchants who ignore dispute trends often find out too late, when fees are already piling up.
FAQ: VDMP and Friendly Fraud
What is friendly fraud, and why does it affect VDMP Visa?
Friendly fraud happens when a customer disputes a legitimate charge, often claiming they didn't authorize it or didn't receive the item. Visa counts these disputes the same way it counts actual fraud, so they can still push you into VDMP.
What's the difference between Visa's Fraud Monitoring Program (VFMP) and the Visa Dispute Monitoring Program (VDMP)?
VFMP tracks confirmed fraud using Visa's fraud reporting tools, while VDMP tracks overall chargebacks, regardless of reason. You can be flagged in both programs at the same time.
How do I know if I'm at risk of being flagged by VDMP Visa?
If your dispute count exceeds 100 per month and your chargeback ratio goes over 0.9%, you're at risk. Some processors will notify you in advance, but not all do.
Does refunding a transaction protect me from a chargeback?
Not always. If the refund is issued after the charge settles and the customer has already contacted their bank, the chargeback can still go through.
How long do merchants stay in the Visa Dispute Monitoring Program?
You stay in the program until your chargeback rate drops below the threshold for three consecutive months. The longer you stay in, the higher the penalties become.
Can friendly fraud disputes be won?
Yes, but it depends on the documentation you have. Clear refund policies, shipping confirmations, and communication logs help. But prevention is more reliable than recovery.
Catch Friendly Fraud Before It Hits Your Limit
Chargeblast helps merchants track dispute patterns, identify risky transactions, and block chargeback spikes before they get out of control. If friendly fraud is stacking up behind the scenes, our platform flags the trends early so you don't get blindsided by a VDMP notice. Stay ahead of Visa's thresholds with tools built for real chargeback prevention.
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