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American Express Reason Code FR2

Amex Chargeback Reason Code FR2: Fraud Full Recourse Program


This is a program that allows American Express to send any dispute without first sending an enquiry to the merchant. This is a kind of identification service done by Amex when it receives a cardholder’s dispute based on actual fraud. Issuer is informed that the transaction was under its monitoring program and has been identified as fraud.

Most Common Causes
  • When merchant falls under high-risk category.
  • When the card issuer receives odd number of inquiries and chargebacks as compare to the previous processing history.
  • Merchant account has been disabled or cancelled due to suspicious activities or violation of the agreement.
Evidence Required
  • If the merchant has issued refund to the cardholder, provide the proof of refund also mention the date.
  • If the merchant has not issued a refund to the cardholder, accept the chargeback.

Prevention tips for merchants to avoid fraud full program:

  • 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 the transactions made via phone. Always verify the account number so that there are no errors or misunderstandings.
  • Identify the type of transaction, such as card-not-present, and use appropriate codes for identifying transactions as e-commerce, telephone order, and Mail order during settlement process and authorization. Usually, this will automatically be done by the processing system, or by an indicator button.
  • Make sure to use security codes and AVS. These services are designed to prevent card-not-present related frauds.
  • Set your billing descriptor correctly. The merchant can manage the way business name appears on the customer billing statement with the help of a tool known as billing descriptor. It usually is set up so that the merchant can display “Doing Business As “(DBA) name, but some processors may use the legal name as per default settings. The merchant can work with its processor to ensure the descriptor is set in a way that would be easier for the customers to recognize. The merchant must also ensure that all the information such as Internet address, state, city, and phone number are displayed correctly so that the customer can locate it.
Common Examples
  1. Linda went shopping and used her credit card. The moment she inserted the chip she realized that her mom asked her not to use the credit card so she asks the cashier if she can use the debit card instead. The cashier doesn’t realize that the payment went through and also accepted the debit card. Later, Linda realizes that both her cards were charged and in fear of her mother she goes ahead and disputes the charge on the credit card under the Reason Code C14: Paid by Other Means.
  2. George goes to a convenience store and buys a sandwich. He swipes his card but then offers to pay cash. However, the charge gets processed so the merchant ensures the cardholder that he wouldn’t deposit the transaction with his acquiring bank. George later views the charge on his account and therefore disputes it under the Reason Code C14: Paid by Other Means.

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Chargeback Prevention