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Mastercard Dispute Rule Changes

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.

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