MasterCard Reinforces Need For Compliance With Rules Prohibiting Use Of MasterCard Systems For Any I

Friday 13 February 2004 02:00 CET | News

MasterCard International has issued a bulletin to its member financial institutions, reinforcing the importance of compliance with all MasterCard standards aimed at preventing the use of MasterCard systems for any illegal activities.

The bulletin notes that MasterCard can require a member that fails to comply with these standards to absorb the cost of any illegal transactions, and in addition, MasterCard could assess, suspend or terminate that member. The key standards members must comply with in connection with the prohibition of illegal activities are: Due Diligence Members must conduct due diligence on merchants from which they elect to acquire, before permitting those merchants to accept MasterCard cards, to ensure that the merchant is engaged in a bone fide business and not in illegal activity. In addition, the member is required to regularly check the merchants website and business activities to confirm that their activities are legal. If there is any doubt about the legality of the merchants activities in any jurisdiction where it intends to provide goods and services, the acquirer should not permit the merchant to accept MasterCard cards until the legality of the activities can be confirmed. Properly Identify Transactions Members must ensure that transactions are identified properly. For example, an authorization request involving Internet gambling transactions must contain the proper codes indicating that the transaction is a gaming transaction and is being conducted by the cardholder via the Internet. Members can reject a transaction if they have any doubts about its legality. Comply With All Applicable Laws MasterCard standards require all members to comply with all applicable laws and not engage in illegal behavior, or in behavior that would cause MasterCard to violate any laws. MasterCard acquiring members are also required to ensure that each of their members comply with the standards. MasterCards bylaws state that each member must conduct its programs and other activities that utilize or otherwise involve any of the MasterCard marks in compliance with the standards and with all applicable laws and requirements imposed by government or regulatory authority. MasterCard is working closely with law enforcement officials to address situations where the legality of activities related to payment card transactions is in question. In the U.S., for example, MasterCard is working with a variety of federal and state law enforcement agencies including: the Drug Enforcement Administration; the Food and Drug Administration; the U.S. Secret Service; the Department of Justice; and, the Federal Bureau of Investigation.

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Categories: Payments & Commerce | Payments General
Countries: World
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Payments & Commerce