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Visa 10.5 - Visa Fraud Monitoring Program (VFMP)

Disputes arising from VFMP compliance violations. If you're in the VFMP, issuers can file disputes under this code.

Overview​

This code is used when a merchant is enrolled in Visa's Fraud Monitoring Program and fails to comply with program requirements, or when fraudulent transactions occur from a VFMP-enrolled merchant.

When This Code Applies​

  • Merchant is in VFMP
  • Fraud transaction from VFMP merchant
  • Merchant failed VFMP compliance
  • Excessive fraud rate violations

VFMP Thresholds​

Standard VFMP Thresholds​

TierFraud Basis PointsFraud Transactions
Early Warning65 bps AND75 transactions
Standard90 bps AND100 transactions
Excessive180 bps AND1,000 transactions

VFMP Timeline​

StageConsequence
Month 1-4Identification, remediation required
Month 5-8$25,000/month fines
Month 9+$75,000/month fines
Month 12Card acceptance termination possible

Conditions for Valid Dispute​

Issuer Must Verify​

  1. Merchant is enrolled in VFMP
  2. Transaction is fraudulent
  3. Within program timeframes

Merchant Situation​

  • Already under enhanced monitoring
  • Limited representment options
  • Higher scrutiny on all disputes

Representment Options​

Limited options when in VFMP:

1. Transaction Was Authorized​

Evidence required:

  • Strong authentication proof (3DS with ECI 05)
  • Cardholder correspondence
  • Device/IP matching prior purchases

2. Fraud Prevention Was Applied​

Evidence required:

  • Fraud screening records
  • 3DS attempt logs
  • Declined transaction history showing controls

3. Exit VFMP Status​

Focus on reducing fraud rate below thresholds to exit program. Prevention > representment.

Prevention Strategies (VFMP Exit Focus)​

Immediate Actions​

  1. Enable 3DS 2.0 - Get liability shift on all transactions
  2. Tighten fraud scoring - Decline more borderline transactions
  3. Review product/pricing - High-fraud products may need removal
  4. Velocity limits - Cap orders per customer/card/IP

Monitoring​

  1. Daily fraud review - Don't wait for monthly reports
  2. Track basis points - Know your real-time fraud rate
  3. Dispute categorization - Understand fraud sources

Customer Verification​

  1. Enhanced verification - Phone/email confirmation
  2. Delivery confirmation - Required signatures
  3. New customer friction - Higher hurdles for unknowns

Win Rate Expectations​

Representment during VFMP is challenging:

Defense TypeExpected Win Rate
3DS fully authenticated70-85%
Strong prior relationship40-60%
Standard evidence15-30%

Reality: Focus on fraud prevention, not representment.

Exiting VFMP​

Exit Requirements​

  • Fraud rate below thresholds for 3 consecutive months
  • Demonstrated compliance improvements
  • Acquirer confirmation

Exit Strategy​

  1. Aggressive fraud blocking - Accept fewer risky orders
  2. 3DS on everything - Maximize liability shift
  3. Product review - Remove fraud-attracting items
  4. Customer segmentation - Whitelist trusted customers

Common Mistakes​

  1. Ignoring VFMP enrollment - Hope is not a strategy
  2. Continuing normal operations - Must change immediately
  3. Fighting all disputes - Waste of resources during VFMP
  4. No root cause analysis - Will re-enter program
  • 10.1 - EMV Counterfeit
  • 10.2 - EMV Non-Counterfeit
  • 10.3 - Other Fraud Card Present
  • 10.4 - Card Not Present Fraud

Next Steps​

In VFMP program?

  1. Immediately implement 3D Secure
  2. Set up dispute alerts to reduce dispute count
  3. Review fraud rules → Tighten velocity checks
  4. Follow the Reduce Chargebacks Fast playbook

Get out of VFMP:

  1. Reduce fraud ratio below thresholds for 3 consecutive months
  2. Work with processor on remediation plan
  3. Consider temporarily blocking high-risk transactions

See Also​