Visa/Mastercard Account Updater Service

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hfrynolte

Good afternoon,

Visa Account Updater (VAU) enables the electronic exchange of account information (card numbers, expiration dates, closed accounts, etc) updated by participants for recurring payments and credentials-on-file (aka card-on-file) transactions among participating Visa card issuers, acquirers and qualified account-on-file merchants. Beginning October 2017, Visa required all FIs to participate in their Visa Account Updater Service (VAU).

We are seeing a significant uptick in member card disputes with cash app, as are many FIs.  We are also seeing the same transactions starting up within a day or two after issuing the member a new card.  The member will again dispute the new transactions - stating fraud once again.  At first, folks were thinking it was possible the member might be part of the fraud, but after reading about VAU and communicating with our Visa Rep, we began to wonder if the continued fraud might be a result of the VAU service.  The member has their card stored at Cash App, and the card number and expiration date is automatically updated via VAU when the replacement card is issue.  If the fraudsters have taken over the member's Cash App account, they could continue with their transactions without missing a beat - revenue stream is uninterrupted.  

We are wondering if other CUs are seeing this (BTW, Mastercard has the same service).  We are also seeking feedback as to how other CUs are combating this potential VAU and fraud issue.  Do you ask your member to opt-out of the service? The FI can't force them, from what we have read.

Any and all feedback is greatly appreciated!  Can email me directly if your would like - new email address: heidifn@MyFortLibertyFCU.org (formerly: heidin@fortbraggfcu.org)