Upheld: Card / payment disputes complaint against Caxton Payments Limited
Financial Ombudsman decision DRN-3923782 of 2023-01-27T00:00:00+00:00. Card / payment disputes complaint against Caxton Payments Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-3923782 |
|---|---|
| Decision date | 2023-01-27T00:00:00+00:00 |
| Firm | Caxton Payments Limited |
| Product | Current account |
| Claim type | Card / payment disputes |
| Outcome | Upheld |
| Remedy | Refund all disputed transactions (EUR 70.31 from July 2021, EUR 35 equivalent from March 2021, and EUR 131.30 from December 2019/January 2020) with simple interest at 8% per annum from date of debit to date of settlement, accounting for any periods when amounts were re-debited |
Summary
Ms H complained that Caxton FX refused to refund EUR 70.31 in unauthorized payments made after she lost her prepaid card in a public transport machine on 13 July 2021. She had reported the lost card to Caxton FX's out of hours service in the early hours of 14 July 2021 and expected a callback. Caxton FX refused the refund, citing the delay in formal dispute and Ms H's history of previous fraud claims, which it had initially upheld but then reversed. The ombudsman found that Caxton FX could not demonstrate Ms H authorized the payments, lacked audit logs showing authentication methods, and had handled previous claims inconsistently. The ombudsman upheld the complaint and ordered refund of all disputed transactions with 8% simple interest, finding Ms H's account plausible and her reporting of the lost card prompt.
The Ombudsman's reasoning
The ombudsman found that Caxton FX failed to demonstrate Ms H authorized the disputed payments. The firm could not provide audit logs showing how payments were authenticated or whether contactless payments were used. The ombudsman noted that Ms H had reported her lost card promptly to the out of hours service and was expecting a callback, which undermined the inference that she had made a false claim. The pattern of Caxton FX initially upholding the March 2021 claim then reversing it within days was inconsistent and suggested inadequate investigation. The ombudsman found Ms H's account plausible given the contactless nature of payments, their concentration within 40 minutes at local retailers, and the rapid depletion of funds. The ombudsman rejected the significance placed on the time to formal dispute, noting Ms H had reported the lost card immediately and would have incentive to claim fraud promptly. The previous claims, while concerning, did not provide sufficient basis to conclude the July 2021 claim was fraudulent, particularly given Ms H had multiple card replacements that did not result in fraud claims.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Caxton Payments Limited, all decisions | 10 | 60% |
| Card / payment disputes, all decisions | 14,085 | 18% |
| Current account, all decisions | 48,245 | 19% |
Source
Read the original decision on the Financial Ombudsman Service website