Mastercard SPME §8.6 · Jun 2022 → May 2023

Coercion Program

substantive

The updated text replaces detailed reporting and procedural requirements for coercion claims with a simplified definition of coercion involving threats or harm to the cardholder or their family, removing specific mandates about police reports, fraud codes, and issuer notifications previously required.

Sources Mastercard SPME · Jun 2022 · page 83 PDF Mastercard SPME · May 2023 · page 90 PDF Chargeback Handling current

Also in §8.x this release substantive §8 Separation control substantive §8.5 Issuer Monitoring Program (IMP) substantive §8.6.1 Issuer Submissions substantive §8.6.2 Investigation Process substantive §8.6.5 Chargeback Responsibility substantive §8.7.5 Assessments, Recovery Amounts, and Fees

Why these edits? The changes in section 8.6 simplify the coercion claim handling requirements by removing mandates around police reports, fraud codes, and issuer notifications, which impacts procedures related to chargeback investigations and handling.

Mastercard SPME §8.6

This section was substantively restructured between versions (2% text overlap). Compare the texts directly below.

Before · Jun 2022 · page 83

Security Rules and Procedures—Merchant Edition • 22 February 2022

Transaction. At Mastercard’s sole discretion, the 120 calendar day period may be expanded.

At least one claim of coercion includes a copy of a police report filed by the Cardholder
The Transactions resulting from the alleged coercion were reported to the Fraud and Loss Database using fraud type code 00 (Lost Fraud) or 01 (Stolen Fraud). At Mastercard’s sole discretion, a Transaction reported with a fraud reason code other than 00 or 01 may be included in the investigation. Additionally, Mastercard will notify those Issuers whose Cardholders have performed a Transaction at the Merchant within the 120 calendar day (or longer) period of the alleged coerced event and who have not already submitted a Cardholder’s claim of coercion that each Issuer has 10 calendar days from the initial notification date to contact the Cardholder, if necessary, and provide:
A police report (if available) When a police report is not provided, the Cardholder’s description must address why a police report was not provided. The Cardholder description must include whether an attempt was made to file a police report and, if not, why a police report was not filed. • The Cardholder’s detailed description of the alleged coercive event.
The Coercion Claim Affidavit Form, completed by the Issuer on the Cardholder’s behalf with the Cardholder’s consent, thereby authorizing Mastercard to contact law enforcement regarding the alleged coercive event. The Coercion Claim Affidavit form is published on Mastercard Connect > Support > Forms.

After · May 2023 · page 90

Mastercard developed the Coercion Program to help address Cardholder claims of being coerced into performing a Transaction. For the purpose of this program, coercion is defined as Cardholder completion of a Transaction due to threatened or actual physical harm to the Cardholder (or the Cardholder’s immediate family member) or the threatened or actual unlawful taking of property from the Cardholder (or the Cardholder’s immediate family member). Mastercard Fraud Control Programs

Halyard Pay · 2 files

Chargeback Handling · rules.yaml

program: Chargeback Handling
- authority: Mastercard SPME §10.1
+ authority: Mastercard SPME 7.10
acknowledgement_business_days: 1
lifecycle_states:
  - first_presentment
  - chargeback
  - second_presentment
  - pre_arbitration
  - arbitration
evidence_requirements:
  first_presentment:
    - transaction_receipt
    - authorization_record
  chargeback:
    - merchant_rebuttal_letter
    - delivery_confirmation
    - customer_communication
  second_presentment:
    - compelling_evidence
    - signed_cardholder_agreement
  pre_arbitration:
    - full_dispute_record
    - prior_correspondence
  arbitration:
    - full_dispute_record
    - arbitration_filing
agent_owner: chargeback_agent
+ 
+ # Note on coercion claims: The prior detailed procedural requirements involving police reports, fraud codes, and issuer notifications associated with coercion claims have been streamlined per Mastercard SPME 8.6. Our chargeback handling process now reflects this simplification by focusing on relevant evidence without mandating police report documentation or issuer notification timing specifics.

Chargeback Handling · policy.md

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the

acquirer, is responsible for managing the full dispute lifecycle on behalf of its

merchants from initial first presentment through arbitration. Each stage of the

lifecycle has specific evidence requirements and strict response deadlines imposed

by Mastercard network rules.

Lifecycle overview

Disputes progress through a defined set of states: first presentment, chargeback,

second presentment (re-presentment), pre-arbitration, and arbitration. Failure to

respond within the applicable timeframe at any stage results in an automatic ruling

against the acquirer.

Required actions

Acknowledge each incoming chargeback within one business day of receipt.
Gather required evidence for the relevant lifecycle state.
Submit a second presentment (re-presentment) where merchant liability can be

contested, including compelling evidence.

Escalate to pre-arbitration and arbitration only after second presentment is

rejected by the issuer.

Maintain complete case records for audit and regulatory reporting.

## Specific considerations for Coercion Claims

Mastercard has updated its Coercion Program to simplify proof requirements for cardholder claims of coercion in transactions, no longer requiring police reports or issuer notifications as part of the chargeback evidence. Halyard Pay will adapt its chargeback handling procedures accordingly to align with the revised Mastercard standards, focusing on the cardholder's statement and other available evidence when coercion is alleged.

Source authority: Mastercard SPME ~~§10.1.~~8.6, 10.19.

policies/chargeback_handling/policy.md — after applying change

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the

acquirer, is responsible for managing the full dispute lifecycle on behalf of its

merchants from initial first presentment through arbitration. Each stage of the

lifecycle has specific evidence requirements and strict response deadlines imposed

by Mastercard network rules.

Lifecycle overview

Disputes progress through a defined set of states: first presentment, chargeback,

second presentment (re-presentment), pre-arbitration, and arbitration. Failure to

respond within the applicable timeframe at any stage results in an automatic ruling

against the acquirer.

Required actions

Acknowledge each incoming chargeback within one business day of receipt.
Gather required evidence for the relevant lifecycle state.
Submit a second presentment (re-presentment) where merchant liability can be

contested, including compelling evidence.

Escalate to pre-arbitration and arbitration only after second presentment is

rejected by the issuer.

Maintain complete case records for audit and regulatory reporting.

## Specific considerations for Coercion Claims

Source authority: Mastercard SPME ~~§10.1.~~8.6, 10.19.

Source authority: Mastercard SPME §8.6.

--- a/policies/chargeback_handling/rules.yaml
+++ b/policies/chargeback_handling/rules.yaml
@@ -1,5 +1,5 @@
 program: Chargeback Handling
-authority: Mastercard SPME §10.1
+authority: Mastercard SPME 7.10
 acknowledgement_business_days: 1
 lifecycle_states:
   - first_presentment
@@ -25,3 +25,5 @@
     - full_dispute_record
     - arbitration_filing
 agent_owner: chargeback_agent
+
+# Note on coercion claims: The prior detailed procedural requirements involving police reports, fraud codes, and issuer notifications associated with coercion claims have been streamlined per Mastercard SPME 8.6. Our chargeback handling process now reflects this simplification by focusing on relevant evidence without mandating police report documentation or issuer notification timing specifics.
--- a/policies/chargeback_handling/policy.md
+++ b/policies/chargeback_handling/policy.md
@@ -23,4 +23,8 @@
    rejected by the issuer.
 5. Maintain complete case records for audit and regulatory reporting.
 
-Source authority: Mastercard SPME §10.1.
+## Specific considerations for Coercion Claims
+
+Mastercard has updated its Coercion Program to simplify proof requirements for cardholder claims of coercion in transactions, no longer requiring police reports or issuer notifications as part of the chargeback evidence. Halyard Pay will adapt its chargeback handling procedures accordingly to align with the revised Mastercard standards, focusing on the cardholder's statement and other available evidence when coercion is alleged.
+
+Source authority: Mastercard SPME 8.6, 10.19.