Upheld: Service failures generally complaint against Caxton Payments Limited

Decision detail

Summary

Mr H loaded funds onto a Caxton prepaid card for travel and attempted to withdraw cash from an ATM in Europe. The ATM returned his card without dispensing funds, leaving the transaction in a 'pending' state. Caxton told Mr H they could not release the funds for 21 days and that Mr H must contact the merchant himself, despite their agreement stating release was at Caxton's discretion. After 21 days, the funds were not automatically released and required manual intervention. The ombudsman found Caxton's rigid application of policy unreasonable, particularly given Mr H was abroad and Caxton had information the transaction was cancelled. The ombudsman upheld the complaint and ordered £75 compensation, finding the initial £10 offer inadequate.

The Ombudsman's reasoning

The ombudsman found that whilst Caxton can have policies to deal with payment issues, rigidly adhering to the 21-day waiting period without exercising their contractual discretion to contact the merchant was not fair. Caxton had information indicating the transaction was cancelled and had the authority under their agreement to release the funds at their discretion. Asking Mr H, who was abroad, to contact a foreign ATM provider himself was unreasonable. The automatic release did not occur and required manual intervention, which Caxton could have done earlier. The £10 offer did not adequately recognise the poor service provided.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website