# Dispute Resolution Cycle
source: https://developer.mastercard.com/mastercom/documentation/getting-started/index.md

The dispute resolution cycle comprises a series of events. After each event, the issuer or acquirer can choose to close the claim or continue the claim until Mastercard ultimately determines financial responsibility for the dispute.

As part of the dispute resolution cycle:

* Issuers can create first chargebacks and file cases.
* Acquirers can respond to Collaboration requests, create second presentments, and file cases.

## First Presentment {#first-presentment}

The first presentment occurs when the acquirer submits transaction data through the Single or Dual Message System to the issuer for posting to the cardholder's account.

## Collaboration {#collaboration}

The Collaboration process attempts to resolve disputes prior to processing of first chargebacks by alerting acquirers to pending disputes using Collaboration requests. The Mastercom system generates most Collaboration requests when an issuer:

* creates a first chargeback and the system places the chargeback temporarily on hold. **or**
* initiates Collaboration through Ethoca.

Acquirers receive Collaboration requests through Mastercom. The acquirers work with their merchants before creating responses to the requests. Acquirers can resolve disputes earlier in the dispute lifecycle and avoid chargebacks by working with their merchants and responding to the requests.
Note: Following the implementation of the Collaboration process, the system generates Collaboration requests on behalf of issuers, with the exception of Collaboration requests for claims with original transactions related to U.S. healthcare. Issuers manually generate Collaboration requests for these types of original transactions.

Refer to [AN 4655 Inclusion of Acquirers in the Mastercom Collaboration Process](https://trc-techresource.mastercard.com/r/bundle/m_AN4655/page/z/) or [AN 4720 Inclusion of Acquirers in Select Countries and Territories in the Asia/Pacific Region in the Mastercom Collaboration Process](https://trc-techresource.mastercard.com/r/bundle/m_AN4720/page/z//) in the Technical Resource Center on Mastercard Connect.

## First Chargeback {#first-chargeback}

An issuer can initiate a first chargeback when the circumstances of the transaction meet the requirements of the chargeback reason code. Refer to the [Chargeback Guide](https://trc-techresource.mastercard.com/r/bundle/m_cbg_en-us/page/d/en-US/) in the Technical Resource Center on Mastercard Connect.

The chargeback transfers funds from the acquirer to the issuer. The chargeback can be for the total transaction amount or a lesser amount. Additionally, one clearing transaction can have multiple chargebacks for partial amounts, but the total amount charged back must not exceed the total transaction amount.

After receiving a first chargeback, an acquirer can choose to acknowledge the first chargeback and close the claim or proceed with the second presentment.

## Second Presentment {#second-presentment}

An acquirer can create a second presentment when the acquirer either (a) believes the issuer's chargeback did not fulfill the requirements of the chargeback reason code or (b) can provide information that addresses the original reason for the dispute.

A second presentment transfers funds from an issuer to an acquirer. A second presentment must be for the total chargeback amount or a lesser amount.

After receiving a second presentment, an issuer can choose to acknowledge the second presentment and close the claim or proceed with the case filling.

## Pre-Arbitration and Arbitration Case Filing {#pre-arbitration-and-arbitration-case-filing}

An issuer can continue a dispute after completion of chargeback cycles using the pre-arbitration and arbitration case filing process. During the arbitration case, the final event in the dispute resolution cycle, Mastercard will determine responsibility for the dispute.

A case filing must be for the total second presentment amount or a lesser amount.

## Pre-Compliance and Compliance Case Filing {#pre-compliance-and-compliance-case-filing}

A compliance case can be filed at any point during the dispute resolution cycle by either an issuer or an acquirer when:

* A Message Reason Code does not exist to address the dispute.
* A rule has been violated.
* A financial loss has been documented as a direct result of the rule violation.

## Fee Collections {#fee-collections}

Mastercom supports the ability of issuers and acquirers to send and receive fee collections related to disputes. For more information about fee collection messages and the fee collection cycle, refer to the [Global Clearing Management System Reference Manual](https://trc-techresource.mastercard.com/r/bundle/m_gcmsrefmanual_en-us/page/d/en-US/) in the Technical Resource Center on Mastercard Connect.