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Processing inbound pre-arbitration and arbitration

Updated on June 29, 2022

Issuers can receive and respond to inbound Pre-Arbitration and Arbitration records under specific circumstances when they violate the internal network regulations as defined by American Express. Acquirers can initiate Pre-Arbitration and Arbitration when the final chargeback issued by the Issuer is not subject to the specific terms and conditions of the American Express process.

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When the Issuer submits a final chargeback, the case is resolved as Final Chargeback. Users can reopen the case and select Receive Pre-Arbitration Letter - Inbound if the Issuer receives Pre-Arbitration from the Acquirer in response to the final chargeback. Similarly, users can select Receive Arbitration Filing - Inbound after receiving arbitration from the Acquirer.

Receive pre-arbitration letter - inbound

If the user selects Receive Pre-Arbitration Letter – Inbound when the case has the Reopen-Resolution status, the case is routed to the Decide pre-arbitration response stage, where the user can enter the Pre-Arbitration amount and select the Issuer response from the following options:

  • Accept
  • Accept partially
  • Reject

If the Pre-Arbitration amount is less than the final chargeback amount, the difference between the Final chargeback amount and the Pre-Arbitration amount is considered to be the amount of Acquirer liability.

If the Issuer response is Accept, for the liability action the user must select Write off or Cardholder liable, or both, and enter the corresponding liability amounts for further processing of the Pre-Arbitration amount. The total issuer liability amount must not be greater than the Pre-Arbitration amount.

If the Issuer response is Accept partially, then for the liability action the user can enter the acceptance amount for Write off or Cardholder liable, or both, if the liability is split, then enter the corresponding liability amounts for further processing of the Pre-Arbitration amount. The total amount of issuer liability must not be greater than or equal to the acceptance amount, and the acceptance amount must not be greater than or equal to the Pre-Arbitration amount. The outstanding amount (the difference between the Pre-arbitration amount and the acceptance amount) is carried forward as the disputed amount for further processing. In the case of both Reject and Accept partially, the case is resolved as Pre-Arb-Declined with the appropriate dispute amount. The Issuer can reopen the case if arbitration is received from the Acquirer.

Receive arbitration filing – inbound

If the user selects Receive Arbitration Filing– Inbound when the case has the Reopen-Resolution status, the case is routed to the Record arbitration filing details stage where the user can enter the Arbitration amount and select the Issuer response from the following options:

  • Accept
  • Reject

If the Arbitration amount is less than the dispute amount, the difference between the dispute amount and the Arbitration amount is added to the Acquirer liable amount.

If the Issuer response is Accept, the user may select Write-off , Cardholder liable, or a combination of both, and enter the corresponding liability amounts for further processing of the Arbitration amount. The total amount of Issuer liability must not be greater than the Arbitration amount.

If the issuer response is Reject, the case is routed to the Edit and send correspondence stage. When the user submits their input, the case is moved to the Record association ruling stage, where the user can record the association ruling from American Express and perform corresponding actions.
  • Previous topic Rules in outbound pre-compliance and compliance
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