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What Does 4840 Chargeback Reason Code Means? Mastercard chargeback reason code 4840: Fraudulent Processing of Transactions, is used when a cardholder claims that a transaction was processed fraudulently. This reason code indicates that the cardholder did not authorize the transaction, and it may be the result of card-present or card-not-present fraud.
Key Details of Chargeback Reason Code 4840: Fraudulent Processing of Transactions
- Definition: The cardholder disputes a transaction, claiming it was processed fraudulently and without their authorization.
- Typical Use Cases: This reason code is applicable in cases where the cardholder alleges that their card information was used without their consent, such as in instances of identity theft, card skimming, or online fraud.
Common Causes of 4840: Fraudulent Processing of Transactions
- Stolen Card Information: Fraudsters use stolen card details to make unauthorized purchases.
- Compromised Account: The cardholder’s account is compromised through phishing, hacking, or other means.
- Unauthorized Transactions: Transactions are processed without the cardholder’s knowledge or consent.
Resolution Time Frame for Mastercard Reason Code 4840
- For Cardholders: Cardholders typically have up to 120 days from the transaction processing date to dispute the charge.
- For Merchants: Merchants usually have up to 45 days to respond to the chargeback by providing evidence to counter the claim of fraudulent activity.
Preventing or Mitigating Chargeback Reason Code 4840
To prevent or mitigate chargebacks due to fraudulent processing of transactions, merchants can implement several best practices:
Implement Strong Security Measures:
- Use EMV chip card technology for card-present transactions to reduce the risk of card skimming.
- Employ secure payment gateways and encryption for online transactions.
Enhance Fraud Detection:
- Utilize fraud detection tools and services that monitor and flag suspicious transactions.
- Set up alerts for high-risk transactions or unusual purchasing patterns.
Verify Cardholder Information:
- Require CVV verification for card-not-present transactions.
- Use Address Verification Service (AVS) to match the billing address provided by the cardholder with the address on file with the issuing bank.
Educate Customers:
- Inform customers about safe online shopping practices and the importance of safeguarding their card information.
- Encourage customers to report any suspicious activity on their accounts immediately.
Maintain Detailed Records:
- Keep comprehensive records of transactions, including authorization logs, customer communications, and any other relevant documentation.
- Respond promptly and thoroughly to any chargeback requests with the necessary evidence to support the legitimacy of the transaction.
