Upheld: mishandling of chargeback and Section 75 claim; failure to properly assess dispute complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr M paid £622.97 to a garage (L) via Tesco Bank credit card for car servicing but claimed L damaged the brakes and failed to properly complete the work. Tesco Bank declined to raise a chargeback citing insufficient documentation and rejected a Section 75 claim, questioning whether brake issues related to the agreed service. The ombudsman found Tesco Bank mishandled both claims: the chargeback requirements could have been met with Mr M's detailed complaint description, and the Section 75 claim was improperly rejected without requesting evidence linking the brakes to the agreed work, despite Mr M providing the manufacturer's handbook. Although Mr M eventually received a refund from L, the ombudsman upheld the complaint and directed Tesco Bank to pay £200 compensation.

The Ombudsman's reasoning

The ombudsman found that Mr M had satisfied the evidential requirements for a chargeback under Mastercard rules without needing to provide an invoice, as the rules permitted a detailed description of the complaint and reasonably specific description of services. Regarding Section 75, while Tesco Bank's caution about DCS agreements was understandable, they failed to ask Mr M for evidence linking the brake issues to the agreed work despite him providing the manufacturer's handbook showing brake work was part of the service. Although Mr M ultimately received a refund from L, Tesco Bank's handling of both the chargeback and Section 75 claim was deficient. The ombudsman did not find evidence that Tesco Bank actively discouraged the Section 75 claim, as mentioning the need for an independent report was reasonable practice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website