Understanding the Mastercard Questionable Merchant Audit Program

As a merchant, it is important to follow a specific set of rules and standards in order to keep your merchant account. One of the many ways you can violate Mastercard’s rules and standards is by violating the Mastercard Questionable Merchant Audit Program. This violation is one of the thirteen reason codes that can place you on the industry blacklist, The MATCH List, and cause you to lose your credit card processing privileges. If you want to keep your merchant account, follow Mastercard’s guidelines, and stay in business, we are here to help. Keep reading to learn more about the Mastercard Questionable Merchant Audit Program and how to get off the MATCH List if you’ve been placed on it.

What is the Mastercard Questionable Merchant Audit Program?

The Questionable Merchant Audit Program (QMAP) establishes minimum standards of acceptable Merchant behavior and identifies Merchants that may fail to meet such minimum standards by participating in collusive or otherwise fraudulent or inappropriate activity. The QMAP also permits an Issuer to obtain partial recovery of up to one-half of actual fraud losses resulting from fraudulent Transactions at a Questionable Merchant, based on SAFE reporting.

What is a Case Scope Period?

As you learn about the Mastercard Questionable Merchant Audit Program, you will see many references to something called the “Case Scope Period.”

Case Scope Period means the 120 calendar-day period preceding the date on which Mastercard commences an investigation into the activities of a suspected Questionable Merchant.

There are many things that a Mastercard merchant must satisfy during the Case Scope Period. They include:

1. The Merchant submitted at least USD 50,000 in Transaction volume during the Case
   Scope Period;
   The Merchant submitted at least five (5) Transactions to one or more Acquirers during the Case Scope Period and
   At least fifty (50) percent of the Merchant’s total Transaction volume involved the use of Cardholder bust-out accounts.
2. The tricky part is that Mastercard has sole discretion, based on information from any source, to determine whether a Merchant meeting these criteria is a Questionable Merchant. This means that even if you follow everything correctly, you may still be placed on the MATCH List due to misinformation. This is why it is so important to keep detailed records so that you can prove your innocence while fighting to get your merchant account back.

What Triggers a Mastercard Investigation?

Wondering what would make Mastercard want to investigate you for their Questionable Merchant Audit Program in the first place? Well, there doesn’t have to be any reason at all. That’s right, Mastercard has the sole discretion to begin an investigation on any merchant at any time.

During the pendency of such an investigation, Mastercard may identify the Merchant being investigated in MATCH using MATCH reason code 00 (Questionable Merchant/Under Investigation). This means that you can be placed on the MATCH List for even just being under investigation, even if you haven’t done anything wrong at all!

Mastercard isn’t the only one who can prompt an investigation. If an Issuer has reason to believe that a Merchant may be a Questionable Merchant, the Issuer can notify Mastercard by email message at [email protected]. In the notification, the Issuer must provide the basis for the Issuer’s reason to believe that the Merchant may be a Questionable Merchant, which can help your case if you can prove that they are opening an investigation for something you are innocent of.

What If Mastercard Says I Violated the Mastercard Questionable Merchant Audit Program?

If Mastercard opens an investigation against you for their Questionable Merchant Audit Program and they find that you are in violation of it, there are several things that can happen. That includes having to pay large fees, being placed on the MATCH List for up to five years, and the potential that you could lose your business altogether. Being placed on the MATCH List can be extremely damaging, which makes it so important to work with experts who can help get you removed from the MATCH List early.

You’ll Pay a Large Fee

If Mastercard finds a violation, you will have to pay a fee—and it may be hefty. Here are the guidelines for what your fee might look like:

• Mastercard may charge an Issuer a filing fee of USD 500 for each Merchant that the Issuer has reason to believe is a Questionable Merchant
• Mastercard may charge each Issuer an administrative fee equal to 15 percent of the Issuer recovery amount from a Questionable Merchant determination.
• If Mastercard determines that a Merchant is a Questionable Merchant and the administrative fee is equal to or more than the filing fee, Mastercard will deduct the filing fee debited from the Issuer account at the commencement of the QMAP investigation from the administrative fee charged to the Issuer at the end of the QMAP investigation.
• If Mastercard determines that a Merchant is a Questionable Merchant and the administrative fee is less than the Issuer filing fee, Mastercard may not debit an administrative fee from the Issuer account at the end of the QMAP investigation.
• Mastercard may charge an Acquirer an audit fee not to exceed USD 2,500 for each identification of a Merchant as a Questionable Merchant.

You’ll Be Placed on the MATCH List

If Mastercard finds you in violation of their Questionable Merchant Audit Program, they have the ability to place you on the MATCH List. Remember—you can be placed on the MATCH List for simply having an investigation open against you, even if they find that you are not in violation of the program.

There is a lot of information about you and your business when you get placed on the MATCH List. This is by design so that you can not open up a new business under a new name while you wait for the original one to “clear” from the MATCH List.

Some of the information that will be on the comprehensive MATCH List includes:

• Your business name in all its forms
• Names of the business owners
• Names of associates
• Business address and contact details

You Could Lose Your Business

Once you have been placed on the MATCH List, you will need to wait five years before you are aged off of the list. After five years, you are erased from the list, and you can go back to functioning as a low-risk merchant as usual.

However, before those five years are up, you will lose your credit card processing privileges. This makes it extremely difficult to conduct business.

You can attempt to apply with a processor who is willing to accept high-risk merchants, which is what you will become after being placed on the MATCH List. Many business types are inherently high-risk—such as tobacco shops, subscription services, and more—but accepting a high-risk merchant who has been found guilty of a Mastercard violation may not have such easy luck.

If you are “lucky” enough to become a high-risk merchant, you will likely have to pay exorbitant monthly fees and be stuck in a lengthy contract.

All this to say; being put on the MATCH List could very well put you out of business.

Getting Off the MATCH List with TFM Law

If you have found yourself on the Match List, you have options. Don’t wait the five-year period, get back to business ASAP.

The Law Offices of Theodore Monroe focuses on litigation and counseling in the areas of payments, credit card processing, e-commerce, direct response marketing, and Federal Trade Commission enforcement.

Last year, the firm removed 100% of the people who came to us from the MATCH list.

Theodore F. Monroe, Founder of TFM Law, has successfully:

• Represented merchants recovering funds from processors
• Structured processing relationships to comply with Card Brand requirements
• Drafted and negotiated contracts involving payment facilitators and ISOs
• Represented continuity merchants in compliance and litigation issues
• Fought for numerous companies in suits brought by the Federal Trade Commission and obtained excellent results for firms in the digital products, loan modification, government grant, and nutraceuticals industries

Before opening his firm, Mr. Monroe practiced law with Crosby, Heafey, Roach & May (now Reed Smith LLP) and Lewis, D’Amato, Brisbois & Bisgaard (now Lewis, Brisbois, Bisgaard & Smith), where he defended numerous accounting and law firms in professional liability actions, and insurance carriers in bad faith actions.

Before becoming a lawyer, Mr. Monroe worked as a forensic accountant at Coopers & Lybrand, which provided him with a unique background in forensic accounting and financial analysis among litigators in Los Angeles. Mr. Monroe studied at Duke University Law School, achieved a BS with Honors in Accounting from the University of Kentucky, and is a member of the California State Bar and the Kentucky State Bar.

For more information, MATCH List resources, or to contact us, visit howtogetoffmatch.com!