Visa / MasterCard Merchant Chargeback Insurance Has Paid 100% Of Claims
With a four-year underwriting history, London Market Association (LMA) has a flawless claims record.
LMA, a Minneapolis based Managing General Agent that provides insurance protection against uncollectible chargebacks for acquiring institutions, has paid all claims presented to them by their policyholders. Christopher L. Kittler the managing agent of LMA states, "The fact is, most clients file claims against the policy in the first year, which clearly substantiates the need for the coverage." Mr. Kittler went on to say, "The strong claims payment record of the policy is the greatest validation to its design."
The program has reimbursed policyholders for chargeback losses arising from merchants' non-delivery of product to the cardholders, unauthorized mail/telephone order transactions, use of lost or stolen card numbers, factoring credit card transactions, misuse of cardholder funds on deposit with merchants, misrepresentation on merchant's application, and deceptive or misleading methods to solicit funds from cardholders.
"Both banks and merchants have used this insurance to supplement merchant funds on deposit to cover any potential losses that may occur through these accounts," states Dennis Fiene, risk management consultant and former Director of Fraud Control at Visa USA. Mr. Fiene added, "The merchant application is stronger through underwriting when the bank is insured against uncollectible chargebacks." The direct result of utilizing this insurance has made many merchants healthier clients for banks by easing mandatory escrow balances, thus returning to the merchant much needed capital to operate their businesses.
Since 1992 the insurance has been used successfully by banks to protect themselves from uncollectible chargeback losses, and use of the coverage has grown at an average annual rate of 395%. The insurance is used to leverage banks capital. Some LMA clients have doubled their processing volume in a year. The coverage can be structured to insure individual merchants, merchant segments, or an entire merchant portfolio.
Both cardholders and merchants are utilizing rapidly changing technology to transact business in the domestic and international marketplace. Merchants are looking to acquiring banks for transaction settlement services through these new techno-marketplaces. By insuring the settlement risk from merchants through merchant chargeback insurance, acquirers can confidently keep up with new technology without betting the bank on it!
For more information on bankcard insurance, contact Christopher Kittler of LMA, 612-288-9882.
