Reason Code UA05 — Fraud – Chip Card Counterfeit Transaction

Encountering a Discover chargeback marked with reason code UA05 can be perplexing.

What does the reason code signify? How can you interpret it correctly? And, most importantly, how can you protect your assets from potential losses?

This article delves into the key elements of Discover chargeback reason code UA05. We'll offer practical advice on identifying the core issue and addressing it effectively.

What is Reason Code UA05?

Discover chargeback reason code UA05 is “Fraud - Chip Card Counterfeit Transaction.” It’s used when a card-present transaction was made using a counterfeit chip-enabled Discover card. This means the fraudster created a fake copy of your customer’s credit or debit card and used it to make purchases.

The reason code is specific to transactions made with chip-enabled cards, also known as EMV cards. These cards have an embedded microchip that generates a unique code for each transaction, making them more secure than traditional magnetic stripe cards.

What Caused This Dispute?

Reason code UA05 is used in response to a transaction involving a chip card, but for which the transaction was made using a magnetic stripe, because your point-of-sale (POS) device is not EMV compliant.

Documentation is not needed to start a chargeback with UA05, and a ticket retrieval request is not necessary. However, the issuer has the option to initiate with a ticket retrieval request, which can later be converted to a UA05 chargeback.

In simple terms, an issuer can file a reason code UA05 chargeback if any of the following cases apply:

When Does Reason Code UA05 Not Apply?

The UA05 Reason Code cannot be used if any of the following are true:

• The point-of-sale device was equipped to handle Chip Card Transactions using EMV technology, as outlined in the Program Documents.
• The transaction was flagged as a fallback.
• The transaction was entered manually.
• The transaction was a remote sale where the card was not physically present.
• The Track Data in the Authorization Request showed the sale wasn't processed with a contact chip payment device.

How to Respond to Discover Reason Code UA05 Chargebacks

If you get hit with a UA05 dispute, despite strictly following guidelines and maintaining compliance with Discover's standards, you have the right to challenge the chargeback. This process, called chargeback representment, requires careful attention to deadlines and documentation.

You’ll need to gather and submit evidence that supports the validity of the initial transaction. Your documentation must be detailed and directly address the reason code UA05.

Fast action is crucial here; according to Discover's regulations, you typically have 20 days to compile and submit your representment package, which includes all relevant documentation. This timeframe might be shorter depending on your processor's rules.

Once your representment package is complete, it gets sent to Discover for evaluation. Following their review, Discover will either agree with your claim and reverse the chargeback or uphold the original dispute decision.

Learn more about representment

Acceptable Evidence for Discover Reason Code UA05 Responses

Discover is not just going to take your word for it. If you want to submit a response, you’ll need evidence.

You need documentation proving that the transaction in question was not fraudulent. This can include POS data showing that one of the following is true:

• your device was enabled to support EMV technology
• a magnetic stripe transaction was identified as fallback in the Authorization Request
• the card transaction was key entered
• the transaction was a card-not-present sale
• the card transaction was a cash advance made at an ATM

Accurate documentation is key when making your case to Discover. Here are some practical tips for assembling your representment package:

• Make sure the info you submit is clear and straightforward.
• Emphasize critical information in your documents to facilitate verification.
• Label and categorize each document appropriately in your submission.
• Provide a brief explanation addressing the evidence related to the reason code.
• Refrain from including superfluous or redundant documents.

How to Prevent Discover Reason Code UA05 Chargebacks

Representment is important. But, it’s even more crucial that you take steps to prevent chargebacks from happening in the first place. Here’s what you can do to prevent Discover reason code UA05 chargebacks:

Implementing preventative strategies can significantly reduce the risk of incurring Discover reason code UA02 chargebacks, safeguarding your business from financial setbacks.

But, even if you do everything right, it’s important to remember that no approach is completely immune to fraud.

At Chargebacks911®, we recognize the myriad of obstacles you face, from maintaining client satisfaction and enhancing services to addressing costly chargebacks. Lacking specialized knowledge and efficient systems can jeopardize your business's reputation. Therefore, it's essential to proactively approach chargeback prevention.

If you're feeling daunted by the complexities of chargeback management, consider enlisting Chargebacks911. We specialize in chargeback mitigation and representment management. To assist you in this challenging process, we offer a complimentary ROI analysis.