4871 - Chip Liability Shift – Lost/Stolen/Never Received Issue (NRI) Fraud
Why did I receive this chargeback?
A chip card was issued, but the cardholder claims not to have possession of it. You processed a transaction without obtaining the cardholder’s PIN, and now the cardholder claims the purchase was unauthorized.
How long can the issuer wait to file a chargeback?
The maximum amount of time that can pass between the transaction processing date and the chargeback processing date is 120 calendar days.
What compelling evidence is needed to respond?
Your chargeback response must include at least one of the following items:
- Explanation and documentation to refute the cardholder’s claim
- Proof the transaction was authorized and the valid card was not an EMV chip card
- Proof that the chargeback is invalid because it doesn’t adhere to Mastercard requirements
- Proof you have already refunded the transaction and credited the cardholder’s account
- Proof the cardholder no longer wishes to dispute the transaction
How can I avoid this chargeback in the future?
- Only use EMV-compliant terminals.
- Always use the correct cardholder verification method—signature, PIN, etc.
- Create an electronic or manual imprint for every card-present transaction.