What Merchants Need to Know About TC40 Fraud Reports

Sep 11, 2025

Visa’s new Visa Acquirer Monitoring Program (VAMP) is reshaping how fraud and disputes are monitored across the payments ecosystem. For merchants — especially those in high-risk verticals — understanding TC40 fraud reports is now critical to staying compliant and keeping your merchant accounts safe.

What is a TC40 Fraud Report?

A TC40 report is generated whenever a cardholder tells their issuing bank that a transaction was unauthorized. The issuer is required to send that report to Visa, which logs it in the system as part of the merchant’s fraud monitoring record.

If the claim escalates into a formal chargeback, Visa will also log a TC15 record (the chargeback).
If it does not escalate, the TC40 still exists and counts toward the merchant’s fraud ratio

This means a merchant can have many more TC40s than chargebacks — and under VAMP, both now matter.

How VAMP Calculates Fraud Ratios

Visa now monitors merchants using a fraud ratio that combines both fraud reports and disputes:

Fraud Ratio = (TC40 fraud reports + TC15 chargebacks) ÷ Total Settled Transactions (TC05)

Even if a merchant’s chargeback rate looks low, frequent fraud complaints can drive the fraud ratio above Visa’s thresholds.

Key Dates and Thresholds

Now (Advisory period, 2025): Visa is monitoring merchants but not yet enforcing penalties.
October 1, 2025: Merchant enforcement begins at a 1.5% fraud ratio threshold. Accounts above this may face reserves, throttling, or termination.
April 1, 2026: Stricter thresholds are expected. Visa has indicated the merchant “Excessive” threshold may be reduced further, potentially to 0.9%, though final numbers have not been confirmed.

Acquirer-Level Monitoring

In addition to merchant-level monitoring, acquirers must keep their portfolios clean. Visa’s thresholds for acquirer portfolios are lower:

Above Standard: ~0.50%
Excessive: ~0.70%

Acquirers often act well before Visa does to protect their BINs. This means a merchant could face early termination even if Visa has not yet formally flagged them.

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Case Count Eligibility

Merchants are typically monitored under VAMP once they exceed around 1,000 combined TC40 + TC15 cases per month. Some acquirers may apply a 1,500-case threshold internally for additional risk tolerance, but Visa’s published baseline remains 1,000.

Do TC40s Always Count?

Yes — TC40s almost always count toward the fraud ratio, even if the transaction is later refunded.

RDR/CDRN: These pre-dispute tools can stop disputes from becoming chargebacks, but they do not remove TC40s.
CE3.0: Some fraud disputes that qualify for Compelling Evidence 3.0 may be excluded, but only if resolved within Visa’s required timeframe.

For most merchants, this means TC40s are unavoidable and need to be managed proactively.

Why TC40s Matter More Than Ever

Under older rules, Visa only enforced chargeback ratios. Merchants with “clean” chargeback percentages could skate by.
Under VAMP, Visa now counts all fraud reports plus chargebacks, doubling the exposure for many merchants.
Merchants must adopt fraud prevention and dispute deflection strategies together to remain compliant.

Final Takeaway

The era of managing only chargebacks is over. With Visa’s new VAMP program, fraud complaints (TC40s) now matter as much as disputes (TC15s).

To stay compliant:

Monitor your fraud ratio proactively.
Use fraud prevention tools to reduce TC40s at the source.
Layer in dispute resolution tools to keep chargebacks down.

Merchants who ignore TC40s risk account throttling, reserves, or termination once Visa’s October 1, 2025 enforcement begins. Taking action now can make the difference between uninterrupted processing and losing your ability to accept payments.