Credit card networks like Visa and Mastercard provide zero liability coverage for unauthorized purchases as a way to encourage usage of their cards over cash or check. This requirement is not applicable to all card issuers.

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By denying purchases through a credit card, a merchant may not be denied liability for the unauthorized purchases made by the purchaser of a specific transaction. However, in some cases a merchant may be denied liability for the entire unauthorized transaction due to multiple unauthorized purchases. For example, a merchant may be denied liability for the purchase of goods that were subsequently used to commit a fraud against the merchant.

A fraudulent purchase may result in the loss of all or part of the merchant’s business. Thus, merchants that deny purchases via credit card are likely to be punished by their insurers. In general, payment card companies do not provide a 100% guarantee that they will not be held liable for the losses caused by fraudulent sales. As an insurance provider, you should only attempt to assert your coverage policy through your preferred claims agent or broker, such as an Assurant Agent or a Major Credit Card Reputation Service (MCRR). You may, however, contact the credit card network directly, or if you need additional assistance, you may use the national phone number located in the top-left-hand corner of the check-out page on the card issuer’s website.

There are several claims recovery companies that are available to assist you in collecting back-payments. The following companies are accepted by the credit card associations:

American Express is the authorized credit card payments processor for most cards. For every purchase, for every merchant, there is a transaction account. Payments are issued to a Visa Cardholder Account. The actual charge to the transaction account is the amount you have paid to American Express. There are three types of credit card payments:

1. Standard Payment This is the standard payment accepted by most merchants, which is used when a charge is the default amount and the transaction was authorized.

2. Advance Payment A merchant may authorize a charge to a credit card when the purchase is the default amount, and it makes sense to charge the cardholder for the full amount to ensure the payment is received within a given timeframe. Advances are made in the form of a balance transfer from the merchant’s balance to the cardholder’s account.

3. Cash Advance This is the merchant’s payment of the actual amount you paid in full. It is usually sent in the form of a check or an electronic transfer to an address the cardholder maintains. Your credit card will indicate that it was an advance.

Important Information About Advance Payments: Before making an advance payment, you should be sure that the merchant or payment network will honor the payment for goods or services, including the cancellation or return of an item, which are not the default amount charged to the credit card.

Back-Payments Under Law: If you must return a purchase because you are dissatisfied with it, you will not be responsible for the return of any items except for the cost of return shipping and any replacement costs paid by the cardholder, if any. The retailer must pay the return shipping costs and allow you to pick up the item at the return address of the original place of purchase.