Understanding Mastercard Chargeback Reason Code 4857: Card Activated Telephone Transaction

Reason Code 4857 covers payments approved via a telephone activation. It is raised when the cardholder complains to the issuer that they didn't authorise the transaction, or that it was incorrect. These chargebacks have since been merged under Reason Code 4843; however, you may still see the old code in filed or historic claims, or due to an error.

Key Takeaways

• What it means: The cardholder did not authorise a transaction carried out after the card was activated by phone.
• Causes: Actual fraud, forgotten authorisation, duplicate processing, or wrong amount.
• How to respond: Compile proof of authorisation. Or, document any refunds in your response.
• How to prevent: Use strong identity checks. File prompt presentments. Monitor terminals.

What is a Mastercard Reason Code 4857 Chargeback?

Note: Reason Code 4857 has now been discontinued and is included under Reason Code 4834. However, the advice below is still relevant to Reason Code 4834 chargebacks relating to card-activated telephone transactions.

Reason code 4857 once applied when a payment followed a telephone card-activation process, and the cardholder later disputed that payment. Telephone activation is common when issuers send out new or replacement cards. The recipient calls an automated line, answers security questions, and the system flips the card status from inactive to active. From that moment, the card can be used at point-of-sale terminals, online checkouts, or ATMs.

If the cardholder later said, “I never approved that charge,” the issuer could raise a chargeback under 4857. The dispute focused on whether the same individual who activated the card also carried out, or genuinely approved, the questioned transaction. Because these events occur at the point of interaction, Mastercard has now consolidated them under code 4834.  At its heart, a 4857 case turns on proof of authorisation. Did the merchant have a valid approval code? Was the cardholder verified during activation? Did the merchant follow network rules when presenting the transaction? Merchants that can answer “yes” with supporting evidence stand the best chance of reversing the chargeback and keeping the funds.

Primary Causes for a Code 4857 Chargeback

There are a number of root causes for this reason code, from fraud to merchant error. The most serious cases involve criminal fraud, where a newly issued card and phone are stolen. The thief is then able to use the phone to call the activation line, appearing to be the cardholder. They can activate the card and use it to make purchases. Friendly fraud also appears. The cardholder forgets they had activated the card and then queries a purchase, perhaps due to an unclear descriptor. Or a family member uses the newly activated card without telling the cardholder.

On the merchant side, double charges or incorrect amounts can trigger this code. Late presentment can also be a trigger. When a transaction sits in a queue and is submitted days or weeks later, the account might be closed or low on funds. The issuer then looks to claw the money back via a chargeback.

Time Limit for Disputing a Mastercard Reason Code 4857 Chargeback

Mastercard rules grant issuers up to 120 days from the original transaction date to raise a code 4857 dispute. The same 120-day clock applies when the issue involves a duplicate, the wrong amount, or late presentment. The timer stops once the chargeback is filed in the Mastercard network; merchants then have a shorter window to contest the chargeback.

Upon receipt, acquirers usually give merchants 20 to 30 calendar days to respond. Exact periods vary by acquirer. Waiting for hard-copy statements or other proof risks missing the cut-off, so merchants should pull data the same day the notice arrives. If the reply is late, the network treats the chargeback as final.

These tight limits highlight the need for clean records and quick workflows. The merchant must know where to find terminal logs, activation data, and refund slips at short notice. Having them ready within the response period stands between keeping and losing the revenue.

What 4857 Means for Consumers & Issuers

For consumers, the code provides a formal path to recover money they believe left their account without consent. The process is simple: call the bank, describe the problem, and sign a dispute form. If the issuer sees clear grounds, a provisional credit reaches the cardholder while the claim moves through the system.

Issuers bear the duty to review each case. They must weigh the cardholder’s statement against internal logs from the activation line. If the caller supplied the correct card data, date of birth, or one-time passcode, the issuer may doubt fraud yet still file the chargeback to obtain more detail from the merchant. The scheme rules allow that step.

Code 4857 also matters for bank fraud teams. A cluster of claims tied to one merchant or one group of terminals may signal a wider breach. The issuer can alert the network, raise hot-card lists, or tighten authorisation controls. Fast detection protects cardholders and limits losses across the portfolio.

What 4857 Means for Merchants

From a merchant’s view, a 4857 notice threatens to reverse a sale and add an extra fee. Too many such cases can push the chargeback ratio above Mastercard thresholds and trigger monitoring programmes. Accepting the loss without review is often the costliest option; fighting with good evidence can protect revenue.

The merchant’s first task is to map the payment path. Was the sale card-present or card-not-present? Did the cardholder enter a PIN on site? Was the receipt signed? Did the clerk see photo ID? Linking these answers to the activation timestamp helps show that the true cardholder used the card.

If the dispute stems from a processing error, the fix is different. A duplicate should lead to an immediate refund, then a copy of that refund goes into the representment packet. A late presentment may be harder to defend, yet the merchant can show that the account was active and funded when the batch reached the acquirer. Clear dates often tip the decision.

How to Respond to a Code 4857 Chargeback

The first step is to read the dispute reason supplied by the acquirer. Even though the code number may be obsolete, the description will reveal the focus: unauthorised transaction, duplicate charge, late presentment, or extra amount. Tailor your defence to that point.

If the claim is “transaction not authorised,” locate proof that the purchase was approved. Provide the electronic authorisation code, time stamp, and any signature or PIN entry captured at the point of sale. If you delivered goods, include tracking data that ties the parcel to the cardholder’s address. In-store collection receipts, CCTV stills, or signed delivery slips can boost your case.

For duplicate charge allegations, show both sales drafts with separate authorisations. Or, show evidence that you have already reversed the extra debit. In late presentment disputes, supply logs proving you transmitted the transaction within seven calendar days of the date of service and that the card was active at the time of submission.

When the issue is an added fee, provide the original agreement—hotel registration form, hire contract, or terms and conditions—highlighting the clause that allowed additional charges. Attach correspondence showing that the customer was informed before the debit.

Package all files clearly. Use a concise cover letter referencing the claim number, amount, and your requested remedy. Submit within your acquirer’s deadline. Finally, monitor the case on your chargeback portal so that any follow-up request from the issuer is answered promptly.

Proactive Prevention: The Ultimate Defence

Stopping disputes before they start is the best way to protect revenue. Train front-line staff to confirm customer identity at every telephone activation or card-not-present sale. Post transactions in the daily batch without delay to avoid late presentment flags. Use clear billing descriptors so buyers recognise your company on their statements.

Audit your terminal settings. Some unattended devices pull partial authorisations, then re-authorise for the final sum. If the terminal fails to void the hold, the consumer sees double-billing, which soon escalates to a chargeback. Setting proper timeouts and batch cycles cuts that risk. You can also try out chargeback alerts. They give merchants early notice of an incoming chargeback, allowing a quick refund or query, which may help keep disputes off your ratio.