Mastercard is modifying its dispute rules in an attempt to reduce the increasing volumes and costs associated with disputes (also known as chargebacks).
Overview of changes
- Mastercard will eliminate the Second Chargeback, Outgoing Pre-Arbitration, and Outgoing Filed Arbitration Cycles from the dispute process
- Trailing activity from these dispute cycles can be expected for up to 180 calendar days
- Mastercard will introduce an Incoming Pre-Arbitration and Incoming Filed Arbitration Cycle
- Mastercard will require issuing banks to initiate a Pre-Arbitration claim prior to initiating a Filed Arbitration claim for the following dispute types:
- Fraud Dispute Reason Code 37
- Cardholder Disputes
- Point of Interaction Error Disputes
- Mastercard will require issuing banks to initiate a Pre-Arbitration claim prior to initiating a Filed Arbitration claim for the following dispute types:
- Authorization Related Disputes
- Fraud Reason Codes 70 and 71
- Mastercard will eliminate dispute Reason Code 63 “Cardholder Does Not Recognize”
- Mastercard issuing banks will no longer be able to bundle more than one transaction into a single dispute case.
Merchants will no longer receive a credit when the First Chargeback Response is sent to the issuing bank for review; however, an adjustment will be processed to the merchant one the credit is received from the issuing bank.