- A lost, stolen or never-received chip card was used fraudulently, usually where PIN should have stopped it
- Confirm the filing condition and regional clock. Your response date is on the notice
- Check PIN and cardholder-verification records against the actual claim. A transaction amount alone doesn't guarantee a defense
- If your terminal allowed a PIN bypass that wasn't permitted, you own the loss
Got this code?
Your deadline: The date on your notice wins. Ask your processor if it isn't clear: the network's issuer filing window isn't your response deadline.
The claim: A lost, stolen or never-received chip card was used, usually where a PIN should have stopped it.
Records that answer it:
- PIN verification in the authorization response
- The transaction amount against the PIN threshold that applied
- The transaction time against the loss report
If you can't support it: If your terminal allowed a PIN bypass that wasn't permitted, you own the loss.
Next: Decide whether it's worth fighting, then fill in the response outline for this claim and follow the Representment Workflow.
When This Code Applies
- Card was lost and used before reported
- Card was stolen and used fraudulently
- Card never received by cardholder (intercepted)
- PIN should have been required but wasn't
- PIN bypass occurred when not permitted
Liability Shift Scenarios
Liability Shifts TO Merchant When:
| Scenario | Why |
|---|
| Chip + signature (when PIN required) | PIN not collected |
| Chip + no CVM | Cardholder verification missing |
| PIN bypass for high-value | Exceeded no-PIN limit |
| Non-chip terminal | EMV not supported |
Liability Stays WITH Issuer When:
| Scenario | Why |
|---|
| Chip + PIN verified | Correct authentication |
| PIN verified online | Issuer approved PIN |
| Low-value contactless | Within no-PIN threshold |
| Card not blocked timely | Issuer delay |
PIN Requirements by Transaction Type
| Transaction | PIN Required |
|---|
| Chip debit | Yes (above threshold) |
| Chip credit | Varies by region |
| Contactless under limit | No |
| Contactless over limit | Yes |
| ATM | Always |
Regional PIN Thresholds
| Region | Contactless No-PIN Limit |
|---|
| US | Confirm your processor, terminal and card's current CVM conditions |
| Europe | Confirm country, issuer and cumulative conditions |
| UK | Confirm the current issuer and terminal conditions |
| Canada | Confirm the current issuer and terminal conditions |
| Australia | Confirm the current issuer and terminal conditions |
A contactless transaction limit isn't a promise that no verification will be requested, or that liability stays with the issuer. Ask which CVM rule applies to this payment.
Time Frames
| Region | Chargeback Window |
|---|
| Standard | Confirm the lost/stolen condition and start event |
| Europe ATM/Maestro | Confirm the product and regional rule |
Use the response date on your notice. The network's issuer filing window isn't your merchant response deadline. Ask your acquirer for the current condition, regional rule and edition before relying on a filing-window summary.
Representment Options
Valid Defenses
- PIN was verified - Online PIN verification
- Below PIN threshold - Transaction didn't require PIN
- Proper CVM performed - Signature where permitted
- Card not reported lost/stolen - At time of transaction
- Refund already issued - Transaction credited
Evidence Required
| Defense | Documentation |
|---|
| PIN verified | PIN verification in auth response |
| Below threshold | Transaction amount vs. limit |
| Signature obtained | Signed receipt |
| Not reported | Timestamp vs. loss report |
Message Text Requirements
| Defense | Message Text |
|---|
| PIN verified | PIN VERIFIED |
| Signature obtained | SIGNATURE |
| Below threshold | UNDER THRESHOLD |
Second Presentment Time Frames
| Region | Window |
|---|
| Standard | 45 calendar days |
| Costa Rica | 10 calendar days |
| Kazakhstan | 30 calendar days |
| Nigeria | 2 business days |
| Tanzania | 20 calendar days |
Which defenses hold up
| Scenario | How it holds up |
|---|
| PIN verified online | Strongest |
| Signature (where permitted) | Weaker |
| No PIN/signature | Rarely wins |
Track your own win rate by reason code instead of relying on a general figure.
Difference from 4870
| Code | Scenario | Card Type |
|---|
| 4870 | Counterfeit card | Fake chip card |
| 4871 | Lost/stolen/NRI | Legitimate card, wrong hands |
- 4870 - Chip Liability Shift (Counterfeit)
- 4837 - No Cardholder Authorization
Prevention Strategies
Terminal Configuration
- Require PIN for debit - Always prompt
- Configure thresholds properly - Honor network limits
- No PIN bypass - Disable where not permitted
- CVM enforcement - Don't skip verification
Transaction Monitoring
- Velocity checks - Multiple transactions same card
- Geographic anomalies - Impossible travel
- High-risk indicators - Gift cards, high value
- Real-time alerts - Suspicious patterns
Staff Training
- Card inspection - Check for tampering
- Signature verification - Compare to card
- Suspicious behavior - Report concerns
- PIN entry privacy - Shield keypad
See Also