Merchants Have New Representment Right for Multiple Fraud-Related Chargebacks
In 2011, MasterCard implemented the Fraud Notification Service (FNS) as a means of ensuring that chargebacks are properly submitted by the issuer.
Accounts that are deemed fraudulent must either be closed by the issuer or the chargeback rights must be relinquished for those accounts. This service also helps determine if a chargeback representment option is possible.
Effective April 19, 2013, MasterCard will expand their rules regarding excessive fraud chargebacks on a single MasterCard card account number and expiration date combination.
Prior to this change, if fraud-related chargebacks occurred on any one MasterCard card account (used at any merchant), the chargebacks could only be represented if the transaction occurred prior to the date of the second fraud-related chargeback (the FNS date). With this modification, if there are over 35 fraud-related chargebacks on any one MasterCard cardholder account (used at any merchant), merchants will have the right to represent the transaction to the issuer. This is a positive change to protect merchants from fraud.