Code 10 Authorization

Code 10 Authorization refers to a special procedure used by merchants to discreetly verify the legitimacy of a transaction when they suspect fraudulent activity or have concerns about the card being used. This process involves the merchant making a telephone call to the card issuer's authorization center to alert them of the suspicious circumstances without alarming the customer.

During a Code 10 call, the merchant communicates their concerns while the cardholder is likely still present. The issuer’s representative will then ask the merchant a series of yes or no questions designed to assess the risk without requiring specific details that might escalate the situation. These questions typically cover the nature of the transaction, the behavior of the cardholder, and any anomalies observed in the card itself, such as signs of tampering or the lack of security features.

Once the situation is communicated, the bank representative will guide the merchant on the appropriate actions to take. This may range from proceeding with the transaction, if the suspicions are alleviated, to retaining the card and notifying local authorities if the issuer confirms the card is stolen or involved in other fraudulent activities. The Code 10 authorization serves as an immediate line of defense against fraud, allowing merchants to take proactive steps to prevent potential losses while ensuring that the interaction remains as non-confrontational as possible.