4850 – Installment Billing Dispute – Participating Countries

PREVIEW

A high-level overview

You received this chargeback because the cardholder claims that an installment billing transaction was not processed as agreed upon. Discrepancies might include:

• You attempted to charge more installments than what was originally agreed to.
• You billed an installment prematurely.
• You classified the transaction as an installment transaction, but it isn’t actually part of an installment billing plan.
• You accelerated the installment payment timeline without consent.

There are a few stipulations an issuer must keep in mind when filing this type of chargeback.

• This reason code can only be used for disputes involving domestic transactions occurring in participating countries.
• The issuer can file one chargeback for the total amount paid or each installment can be disputed individually.
• The chargeback amount(s) can not be more than the total installment amounts paid to date. The issuer can’t chargeback the entire transaction amount if the entire amount hasn’t been paid.
• If the installment billing plan was unauthorised, the issuer might use reason code 4837 (no cardholder authorisation) for the first installment and 4850 for each subsequent transaction.

In most situations and regions, a chargeback with this reason code must be filed within 120 days of the processing date for the disputed transaction.

If you – the merchant — have the required data and supporting documents, you can fight an installment chargeback. At most, you will have 45 days to respond.

Here are some tips to help prevent this type of chargeback in the future:

• Clearly explain your installment billing plan, including amounts and future transaction dates.
• Share your terms and conditions on the checkout page near the submit button. Require customers to select a “click to accept” box or agree to the payment plan in some other way before completing the purchase.
• Remind customers of upcoming charges, especially if a significant amount of time passes between each installment transaction.
• Make sure you properly note the installment billing plan in the required message fields for each transaction.
• If the initial transaction is disputed as fraud, be sure to cancel future installments.

NOTE

Because this chargeback impacts a small portion of merchants, we aren’t going to elaborate on what causes this dispute or how to respond. If you are a merchant or acquirer and need additional details about this reason code, we recommend you consult the latest version of the Mastercard chargeback guide. You’ll find a section on installment billing chargebacks in chapter 2 (dual message system chargebacks).