How Can I Reduce My Amount of CNP Fraud?

Be Aware. Be Prepared. Ask for Help.

Fraud can take many forms and sometimes is not even willful on the perpetrator, but can result in a drain on your resources and loss of money. No one wants to deal with chargebacks, but they are inevitable at times. The key is figuring out how to proactively prevent what you can, and how to best respond to the ones you receive, since we believe the incidences of card-not-present fraud will only continue to increase.

  1. Look for obvious signs of fraud:
    1. Have you received an odd number of one-night reservations in a short period of time and at an unexpected time? If so, these reservations may be attempts to test credit cards to see if they can be authorized and the reservations may be false and removing units from your inventory. Put a system in place to verify these reservations.
  2. Put in safeguards:
    1. Do you have a system in place for last minute reservations to verify their identity before heading to the room or rental unit using your contact-less check-in?
    2. Have you verified that travelers have seen and agreed to all your policies and procedures?
  3. Understand all the ways you are vulnerable:
    1. No company is immune from chargebacks or people trying to defraud them, whether it be a deliberate attempt or a more benign disagreement or misunderstanding. Review all the ways, your lodging organization may be exposed to fraud and chargebacks.
  4. Prepare for disputes:
    1. Do you have internal procedures for chargebacks? Is all the necessary documentation easily accessible and in the correct format?
  5. Ask for help:
    1. Before responding to a chargeback – as for help. Ascent Processing is here to help you and can review your response before you submit it. There are times where we can help you word responses in the format that credit card companies prefer, or can tell you where you need to provide more information.

If you have questions or want more information on our excellent chargeback support, fill in the form on this page or contact us at


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Understanding Fraud: Terms & Definitions

To better understand the nature of these chargebacks and what you will see more of moving forward, we want to discuss definitions for terms you might hear, chargeback codes you might see, types of fraud, and even some simple examples that show the true complexity of chargebacks.

Something that everyone who deals with chargebacks should understand is that the definition of ‘fraud’ when it relates to chargebacks is probably a bit more open-ended than you think it is. For many in the processing industry, the term fraud does not just apply to bad-actors or ‘fraudsters’ who steal credit card numbers and personal information to steal products, services or money, which we can call ‘Traditional Fraud’.

The term fraud is also more broadly applied to the actual cardholder when they initiate a chargeback for services they did purchase or receive. When the actual cardholder initiates the chargeback dispute this is referred to as ‘Friendly Fraud’. To confuse that issue further, you will see sub-categories of Friendly Fraud. For example, some of these disputes are ‘Benign’ which allows for chargebacks that are initiated by the cardholder in good faith, such as not recognizing the charge, misunderstanding policy, or having a legitimate dispute. When these ‘benign’ chargebacks are submitted by the cardholder, as you will see the most likely chargeback code will fall under the classification of fraud.

Hostile Friendly Fraud’ is when a cardholder initiates a chargeback dispute to receive monies that they are not due. Basically, they are taking advantage of a system that favors them over the merchant (especially when the card is not present). According to Global Risk Technologies (GRT) in their examination of Friendly Fraud, “approximately 86% of chargebacks are fraudulent, and many consumers bypass merchants to directly file complaints with card-issuing banks”.

‘Card-Not Present’ Fraud/Chargeback Codes

If you are unlucky enough to be on the receiving end of a CNP Fraud  chargeback, below are some of the more-likely codes that you will see associated with the dispute.

No Cardholder Authorization (4837) The cardholder states that neither he, she, nor anyone authorized by him or her engaged in the transaction.

Card Holder Does Not Recognize (4863) The cardholder claims that they do not recognize the transaction and states that they did not authorize the ­­­­­charge to their credit card.

Other – Card Absent Environment (10.4) Cardholder did not authorize or participate in a transaction conducted in a card-absent environment (i.e., internet, mail-order, phone-order, etc.).

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