If we have a customer who initiated in a funds transfer through Venmo or Apple Cash for Goods or Services, are we required to submit a dispute on their behalf? 1) they willingly participated in the transaction 2) it states in their terms and conditions that they do not cover goods or services.

I think the first point, i.e. they willingly participated, is irrelevant as this is a merchant dispute. As to the second point on not receiving the goods, that begs a question for me - who paid the merchant? Is the transaction between you and Venmo/Apple Cash just a funds transfer or is it considered the payment of the merchant? If it's considered the former then I would think the consumer would need to go to Venmo/Apple Cash with their dispute as you were not involved with the merchant. Definitely curious on the thoughts of others about this.

I'm making an assumption here, so please clarify if I got it wrong. Assuming the Venmo account is backed by a debit card, then it could fall under Reg E for some scenarios, though it's not common. Either way, our practice is to file the dispute for the customer, and then deny if we find that it's one of those scenarios where they sent money to someone from FB marketplace and then never got their puppy. The verbiage we use in the deny letter is:

What type of Apple Wallet transaction may also come into play. If the transaction is Apple Cash (where value is stored by Apple after being loaded from debit card/banking account/etc.) the rules can differ from transactions that are Apple Wallet, which does not store value but overlays a separate account number as a security measure over the consumer's debit or credit card number.