MasterCard implemented the Fraud Notification Service (FNS) as a means of ensuring that chargebacks are properly submitted by the issuer in 2011. By this way, merchants have new representment right for Multiple Fraud-Related Chargebacks. This service helps determine if a chargeback representment option is possible.
MasterCard expanded their rules regarding excessive fraud chargebacks on a single Mastercard card account number and expiration date combination in 2013. Prior to this change, if fraud-related chargebacks occurred on any one MasterCard card account (used at any merchant), the chargebacks could only be represented if the transaction occurred prior to the date of the second fraud-related chargeback (the Fraud Notification Service date). The Fraud Notification Service (FNS) alerts the acquier in the event that issuer has submitted two or more chargebacks involving the same Mastercard card for any fraud related chargebacks.
MasterCard lowered the value of the Fraud Notification Service (FNS) counter from 35 to 25 fraud-related chargebacks for chargebacks processed on or after 2015.
Acquirers may use representment for fraud related chargebacks reason codes included after fraud count is two or greater if:
- The transaction being charged back was authorized after the date included in the Fraud Notification Service (FNS) date field, or
- The value of the Fraud Notification Service ( FNS ) counter exceeds 25.
Effective 14 October 2016, Mastercard will block fraud – related chargebacks that exceed the Fraud Notificaton Service(FNS) criteria. With this change, if there are over 25 fraud-related chargebacks on any one MasterCard cardholder account (used at any merchant), issuers will not have chargeback right . This will be a positive change to protect merchants from fraud.
Fraud related chargeback reason codes for Mastercard :
- 4840—Fraudulent Processing of Transactions4870—Chip Liability Shift
- 4871—Chip/PIN Liability Shift
- 4849—Questionable Merchant Activity
- 4837—No Cardholder Authorization
- Note : For message reason code 4863 (Cardholder Does Not Recognize—Potential Fraud), first chargebacks will be included in the FNS count once the FNS fraud chargeback count is two or greater.