Not upheld: unauthorised payment / disputed transaction complaint against Barclays Bank UK PLC

Decision detail

Summary

Ms O disputed a payment of approximately £1,600 made from her account to a retailer for a phone, claiming she did not authorise it. The payment was made using her old Barclays card which she had cut up, and it put her into an unauthorised overdraft. Barclays declined to reimburse the transaction, and Ms O escalated to the FOS. The ombudsman examined the technical authentication evidence, which showed the payment was authenticated through two-factor authentication including biometric identification on Ms O's device, and found that the transaction data (including Ms O's name and address) indicated she had authorised the payment. The ombudsman rejected Ms O's arguments that Barclays' concurrent IT issues enabled account takeover or compromised the reliability of the technical data. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which require that for a payment to be unauthorised, it must not have been properly authenticated and the customer must not have consented to it. The ombudsman found that the payment was properly authenticated through two-factor authentication including biometric identification. The ombudsman then assessed whether Ms O consented to the payment by examining: (1) the absence of any apparent compromise of card details; (2) technical evidence that only Ms O's device was used for her account during this period, with consistent IP addresses for both disputed and undisputed activity; (3) the requirement for biometric authentication which only Ms O's data could unlock; and (4) the fact that the order was placed with Ms O's full name and correct address, making it unlikely a fraudster would arrange delivery to her address. The ombudsman rejected Ms O's argument that Barclays' IT issues allowed account takeover, finding no evidence of account compromise, new devices, or subsequent fraudulent activity. The ombudsman also found that Barclays properly followed Ms O's payment instructions by processing the transaction on the unblocked old card and allowing it to proceed despite insufficient funds, as Ms O would have been aware of her balance from multiple logins.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website