Not upheld: failure to prevent gambling transactions and refusal to process chargeback or Section 75 claim complaint against Barclays Bank UK PLC trading as Barclaycard

Decision detail

Summary

Mr U complained that Barclaycard failed to prevent him from using his credit card for gambling transactions with unlicensed operators, resulting in losses of approximately £6,000. Mr U, who is registered with GamStop and has a gambling addiction, argued that Barclaycard should have blocked the transactions under UK law and should have identified his vulnerability. Barclaycard declined to process a chargeback or Section 75 claim, arguing the transactions were authorized and the MCC codes did not indicate gambling. The ombudsman upheld Barclaycard's position, finding that the acquiring bank's use of non-gambling MCC codes prevented Barclaycard from identifying the transactions as gambling-related, and that there is no legal requirement for lenders to block such transactions. The ombudsman concluded that neither chargeback nor Section 75 claims were viable remedies and that Barclaycard acted fairly in its assessment.

The Ombudsman's reasoning

The ombudsman found that Barclaycard could not have identified the transactions as gambling-related because the acquiring bank used incorrect MCC codes, over which Barclaycard has no control. While UK law prohibits gambling transactions on credit cards, this obligation falls on gambling merchants, not lenders, and there is no legal requirement for lenders to block such transactions. The ombudsman concluded that neither chargeback nor Section 75 claims were viable remedies, and that Barclaycard's consideration of these options was fair and reasonable. Consumer Duty obligations do not override the assessment of these claims and do not require Barclaycard to prevent transactions it cannot identify as gambling-related.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website