Fraud Chargeback Exception Clause Samples
The Fraud Chargeback Exception clause defines the circumstances under which a party is not held liable for chargebacks resulting from fraudulent transactions. Typically, this clause outlines specific criteria that must be met for a transaction to qualify as a fraud chargeback, such as the use of stolen payment credentials or unauthorized account access, and may require supporting documentation or timely notification. Its core practical function is to allocate risk and responsibility for fraudulent activity, ensuring that parties are protected from financial losses due to fraud beyond their control.
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Fraud Chargeback Exception. Notwithstanding anything to the contrary in Section 6.1, but subject to the limitation set forth in Section 6.2(b), HSBC and Merchant agree that where Merchant follows the terms and procedures and provides the information set forth below, a Card Sale or Sales Slip which is reasonably determined by HSBC to be the result of customer fraud, shall not be subject to Chargeback under Section 6.1.:
(a) Merchant shall comply with Sections 5.4, 5.5, and 5.6.
(b) Within twenty-one days of receipt of HSBC’s request, Merchant shall provide to HSBC a copy of the signed application, a copy of the applicant’s identification(s) provided at the time of the application, signed Sales Slip, and, if the Goods are shipped, signed delivery receipt.
(c) Merchant shall receive a valid authorization code.
(d) For Card Sales made to a Cardholder on the telephone or through the Internet, Merchant shall not ship for 24 hours after an approval to allow HSBC time to notify Merchant of suspected fraud after any appropriate fraud checks.
(f) If Merchant has not yet shipped Goods, Merchant shall stop shipment when HSBC notifies Merchant that the transaction is a suspected fraud.
Fraud Chargeback Exception. Notwithstanding anything to the contrary in Section 6.1, but subject to the limitation set forth in Section 6.2(b), HSBC and Merchant agree that where Merchant follows the terms and procedures and provides the information set forth below, except as provided in Section 5.4, HSBC may only chargeback the portion of the Card Sale or Sales Slip which is reasonably determined by HSBC to be the result of customer fraud that is equivalent to 50% of the Card Sale or Sales Slip. The liability of HSBC for all chargebacks is limited to an amount equivalent to 1% of annual Net Card Sales.
(a) Merchant shall have complied with Sections 5.4(a) through 5.4(h) with respect to the transaction in question.
(b) Within fifteen (15) Business Days of receipt of HSBC’s request, or such earlier time as may be required by HSBC, Merchant shall provide to HSBC a copy of the signed application, signed Sales Slip, and, if the Goods are shipped, signed delivery receipt, and the signature on the application matches the signatures on the Sales Slip and, if the Goods are shipped, delivery receipt.
(c) For Card Sales made to a Cardholder on the telephone or through the Internet, Merchant shall not have shipped for 24 hours after an approval to allow HSBC time to notify Merchant of suspected fraud after any appropriate fraud checks.
(d) Merchant shall not have shipped to an address other than the billing address.
(e) If Merchant has not yet shipped Goods, Merchant shall stop shipment when HSBC notifies Merchant that the transaction is suspected fraud.
Fraud Chargeback Exception. Notwithstanding anything to the contrary in this SECTION 6, Household and Merchant agree that where Merchant follows the procedures and provides the information set forth below, an application, Card Sale, Sales Slip or other Card transaction reasonably determined by Household to be the result of customer fraud ("Fraud Chargeback") shall not be subject to Chargeback under this SECTION 6 if the following conditions have been met by Merchant:
(i) For applications, Merchant shall provide verification of the applicant's identity and current address by (1) witnessing the signature on the application of each person whose name will appear on the Account or who will be responsible for the Account; and (2) obtaining a copy of one of the following: an unexpired in-state driver's license containing the applicant's photo and current residence as listed on the application, or a current in-state identification card containing the applicant's photo and current residence as listed on the application, or a valid US Government issued military identification, or a valid United States Passport containing the applicant's photo and reviewing such identification to ensure that the applicant substantially resembles the person described thereon; and (3) reviewing an unexpired major credit card (e.