Exceeds Floor Limit – Not Authorized and Fraudulent Transaction - RC 4847

Merchant was unable to verify the authorization code of the transaction at the time of purchase. A card-not-present transaction occurs when cardholder files a complaint that he/she neither participated nor authorized a particular charge. A card-not-present transaction occurs on a fictitious account number on which owner’s authorization was not obtained. Telephone sales, mail-order, Internet/online sales, monthly subscriptions, recurring and prepayment transactions are examples of card-not-present transactions. Mostly this situation occurs when someone fraudulently uses someone else’s credit card and processes card-not-present transaction without the consent or permission of the cardholder. Sometimes, cardholder does not recognize a card-not-present transaction on his statement because of the invisible, unclear or confusing merchant or product name.

Most Common Causes

• POS device was not authorized for strip-read, online and face-to-face transactions, but only card-read or key-recorded transactions.
• The transaction was not approved.
• The card provided a service code of X2X (Positive Online Authorization-Only), but the transaction was not approved.
• The transaction amount passed the limit from the floor limit that was installed by MasterCard at the time of purchase and was not approved.
• The authorization request was denied or the transaction was made by an expired card.
• If not authorized by Technical fallback and CVM fallback transactions.
• The merchant processed a fictitious account number on which card owner’s authorization was not obtained.
• The merchant processed a transaction card owner did not participate in.
• The transaction is processed on the invalid card using an account number.
• A family member ordered from the primary cardholder’s account without his permission.
• It is also caused by the owner of the card not able to recognize purchase on the billing statement.

Evidence Required

• The merchant should provide the document that business did not need to authorization.
• The merchant may present the document that the cardholder obtained authorization for the transaction amount.
• Providing the amount that was authorized, authorization approval code, and the date of the authorization the merchant should document the incomplete authorization
• The transaction was below the issued floor limit and there was communicate failure to buyer or failure to POS device at the time of buying, the merchant should present document.

Prevention

• Make sure to obtain an authorized approval for all the e-commerce and recurring transactions regardless of the dollar amount.
• Read back the account number, especially for transactions made via phone. Always verify account number so that there are no errors or misunderstandings.

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