Mastercard Chargeback Reason Code 4857: Card Activated Telephone Transaction

What is Mastercard Chargeback Reason Code 4857?

The Mastercard chargeback reason code 4857 covers card transactions activated through the telephone. It could be through a PIN, token, phone call, security question, etc. However, the cardholder denies authorizing such a transaction and files a chargeback claim.

Let's briefly explore how card-activated telephone transactions function. They generally involve new cards, where the cardholder calls a number and follows instructions to activate the card. Then, such a card can be used to authorize payment at the point of interaction.

This process applies primarily to new cards but can also be used on old cards to authorize payment. Here’s where things go wrong to the point of requiring a chargeback. The cardholder believes they did not authorize the transaction through telephone or other means.

Disputes arising from such transactions fall under reason code 4857. They call the bank to activate the card and follow the instructions. Any disputes that arise under that transaction will be covered under reason code 4857.

It could be that the cardholder never authorized the transaction or that a duplicate payment was processed.

Important Notice

Note that this specific Mastercard chargeback reason code has been discontinued. All point-of-interaction errors now fall under the reason code 4834. Hence, refer to that as a guide in addressing the dispute and fighting the cashback.

Why Did It Happen?

You will receive this chargeback if a cardholder files claims of not authorizing a card-activated telephone transaction. These chargebacks often occur at points of interaction, such as point-of-sale terminals. As stated in the previous section, this transaction usually involves new cards.

That means the card has never been charged for any payment before. The possible causes that could prompt a cardholder to file chargeback claims include the following:

• Scenarios might include situations where the cardholder's phone was stolen, subsequently used to activate the new card, and make a payment.
• The cardholder made the payment but forgot about it, resulting in a denial.
• You processed multiple transactions on the card-activated transaction even when the cardholder authorized one payment.

The first case of a stolen phone would amount to actual fraud. That happens, hence the need for heightened security checks both online and offline. Besides that, you’d have a case of friendly fraud where the customer forgets about making the payment on the said date.

Processing multiple transactions can also be a cause for this chargeback. Since it involves a card-activated telephone transaction, it will be traced back to this code.

Let’s review other reasons for code 4834 since that is the new reference for this chargeback. The plausible causes include the following:

• The cardholder did not receive the cash at an ATM after activating the card and processing the transaction. This falls under the ATM disputes sub-category.
• The cardholder denies authorizing additional charges for loss, damages, or theft.
• There was a duplicate transaction when the buyer only authorized payment once
• The debited amount exceeded the amount authorized by the cardholder.
• The final charge was an unreasonable amount or an amount the cardholder never anticipated

You can also receive this chargeback if you process your payment late. The shorthand reason is “late presentment.”

Friendly Fraud and Recurring Payments

A cardholder may have activated a recurring payment and forgotten about it. That could lead to chargeback claims when the next payment is processed. This case of friendly fraud is another reason you will be charged back under this code.

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How to Fight Mastercard Chargeback Reason Code 4857: Card Activated Telephone Transaction

Again, this code has been retired and folded into 4834. We recommend referring to the latter when fighting this chargeback because it covers other causes.

You must identify the underlying reason for this chargeback to fight it effectively. For example, is the chargeback an ATM dispute, a duplicate transaction, or a different amount? These cases require specific documents to prove your argument and reverse the charge.

With that in mind, here are the ways you can fight this chargeback effectively:

• Submit clear copies of the ATM audit tape and the internal transaction report as evidence. These documents will demonstrate that the machine dispensed the cash correctly, potentially qualifying you for a reversal of the chargeback.
• Submit proof that you processed the transaction and submitted the presentment within seven days of the transaction date. Additionally, demonstrate that the buyer's account was active when you submitted your presentment for the transaction. (This pertains to cases of late presentment).
• Provide documents proving that the transactions disputed as duplicates had independent authorizations. If a duplicate transaction was processed mistakenly, show that you have refunded the buyer.
• Provide evidence of the buyer's prior consent to additional charges for loss, damage, or theft before processing the payment. This will confirm that the cardholder was informed before the card-activated telephone transaction took place.
• Present evidence that the cardholder agreed to your specified payment range before you processed the transaction. This method is applicable in disputes concerning unreasonable amounts.
• Offer evidence of a refund if you processed the transaction in error or without authorization.

Your ability to fight this chargeback boils down to your carefulness with your records. Keeping details of this transaction ensures you have enough evidence to refute the cardholder’s claims. However, there have been instances of actual fraud where the cardholder genuinely did not authorize the payment.

How to Prevent Mastercard Chargeback Reason Code 4857: Card Activated Telephone Transaction

No system is 100% foolproof. For example, you don’t control the cardholder’s actions, and anyone who wants to instigate friendly fraud will still do so. Nevertheless, you must take steps to prevent chargebacks under this code.

A few things you can do include:

• Do not force card-activated telephone transactions when they fail. Advise the cardholder to use an alternative payment method.
• Issue refunds if the ATM fails to dispense processed cash.
• Request cardholders' consent to additional charges for damages, loss, and theft before processing a payment.
• Issue a refund immediately for duplicate transactions.
• File presentments as soon as the transaction is processed.
• Use anti-fraud tools to verify cardholders' identities before processing payments.

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