A situation might occur where a payment shows as Paid in the Payments screen, but the payment might have been disputed and therefore status needs to change. 

A customer might contact you about this or you may see by logging into the payment processor like Worldline.

 

 

Bambora/Worldline send through email notifications. They will always send them through and its important to check those against bond. the majority will represent those that are true NSFs and bond will update a couple of days later to show the status of Declined. However, if you compare the NSF notifications to the Transactions and Payments report and you see a payment in that report, but you have a NSF notification, that’s the trigger for it likely being disputed. A payment will not show as successful in that report (nor even show in that Payments tab), if it is a decline as the platform will recognise those, as mentioned earlier. 

 

If you use Valet Finance, they will notify you and provide advice on whether it is a disputed payment vs a declined one. 

 

 

This usually occurs because it is marked as paid as the processor did originally return as paid but then it was disputed by the customer with their bank or by the banks themselves. Sometimes it is fraudulent and sometimes it can be due to chargebacks. So, from an accounting perspective, it WAS originally paid, but then disputed by the customer and therefore is reversed and needs to be collected again if required.  

 

 

The process required to handle these situations is NOT to switch the payment back to Unpaid, but to change it to Disputed, and here is the workflow:

 

There is now an Action icon next to Paid payments. (here is a before and after):

 

 

 

Note: 

The Dispute feature is unavailable on Manual Payments. You will receive an error message to confirm this. You collect manual payments by methods that do not have the process that a disputed credit card payment does (cash, cheque, e transfer). See this recording. (recording has no sound).

The Dispute feature is unavailable on a refunded amount that has been generated to reflect the dispute.  See the section at the bottom of this article called Refunded / Disputed amounts. 

If you establish that the policy needs to be cancelled, after speaking with your customer, you can go ahead and process the cancellation.  See Cancellation section of this article.

 

 

• Select the Action icon.
• Disputed is a menu option. 
• Select.
• The question pop up 'Are you sure you want to set this payment as disputed' appears.
• If yes, select.

 

What happens next:

 

• The 'original' disputed payment shows as Disputed.
• A Policy Payment Retry transaction is created - which is on HOLD. This allows you to attempt to collect the payment from your customer again.
• To take that HOLD payment off hold, select the Action icon, select Unpaid and this would return the status to Unpaid.  This would then allow the payment processor to run that payment again, that evening. 

Or you could choose Pay and select one of the other methods, if you want to collect by cheque, e transfer or cash (or another method outside of the platform).

• A Policy Payment return payment (reverse payment) is created for the original payment to net it out, as shown here:

 

 

Here is the Policy Payment Retry transaction for you to collect the payment from your customer:

 

 

Because there is a payment returned by the bank, there is the NSF fee too, shown above.

This is also on HOLD until you take it off to collect that payment too.

 

View a demo of how disputed payments work, here.  

 

 

There is an activity generated, which confirms that there is a disputed payment, with a description in the notes with instructions to contact the insured, shown here:

 

 

 

 

It is possible that the NSF fee may be the transaction that is disputed by the customer/bank.

In that scenario, the same disputed transaction process occurs and it will look the same on the Payments tab, however there will NOT be another NSF fee added to that process.

There will be a transaction to net off the NSF fee, then a new transaction for the attempt to be made with the customer to collect it again, shown here:

 

 

 

 

If you try and dispute a payment that has been generated to show the refund (reverse) of the original payment, you will not be able to and you will receive an error message with that explanation.

 

Here is an example. 

 

We have a $30.04 disputed payment, and the 'refund' (reverse) of that payment, shown on the Payments screen to reflect the return (reverse) of that payment that the system shows as paid but was not collected:

 

 

If you try to use the Action icon to select Dispute, an error warning appears and you will be stopped from trying to perform this, shown here:

 

 

 

If you establish that your customer does wish to cancel the policy, you will need to still mark the payment as disputed, if that is the case.  That way the cancellation refund amount calculated will be correct and you will have the accounting correct too. 

 

 

How would we know if a payment is Disputed?

 

Bambora/Worldline send through email notifications. They will always send them through and its important to check those against bond. the majority will represent those that are true NSFs and bond will update a couple of days later to show the status of Declined. However, if you compare the nsf notifications to the Transactions and Payments report and you see a payment in that report, but you have a nsf notification, that’s the trigger for it likely being disputed. A payment will not show as successful in that report (nor even show in that Payments tab), if it is a decline as the platform will recognise those, as mentioned earlier. 

 

If you use Valet Finance, they will notify you and provide advice on whether it is a disputed payment vs a declined one. 

 

Journal Entries with regards to Disputed payments 

 

In black, select Accounting icon, you can review the Journal Entries tab to ensure all transactions are as expected.

 

Using our above example, we can see the relevant journal entries have been created, shown here:

 

 

The above image shows:

 

• The Payment paid via Credit Card $30.04 (original payment).
• NSF fee for the payment.
• The Payment Refund paid via Credit Card (the return (reverse) of the payment, as it was not collected).

 

You will also be able to review the journal entries here, for the disputed NSF fee example provided.