Not upheld: unauthorised transaction / service not received complaint against Vanquis Bank Limited

Decision detail

Summary

Ms I complained that Vanquis Bank Limited declined to refund a £670 transaction to a flight booking merchant that she reported as unauthorised. Vanquis investigated and found the payment was properly authenticated through 3D Secure on Ms I's banking app and declined the refund. Ms I later revealed her daughter had made the transaction without her knowledge, though she maintained she had not shared her card or security details with anyone. The ombudsman found that Ms I must have knowingly shared her card details and security information with her daughter, making the transaction authorised under the Payment Service Regulations 2017. The ombudsman concluded Vanquis acted reasonably in treating the claim as fraud and was not obliged to pursue alternative remedies such as chargeback or Section 75 claims, and did not uphold the complaint.

The Ombudsman's reasoning

Although the transaction was authenticated through 3DS, authentication alone does not prove authorisation. The ombudsman considered whether Ms I consented to the payment. Ms I later revealed her daughter completed the transaction without her knowledge. The ombudsman found it unlikely the daughter could have guessed passwords and accessed the phone without Ms I's knowledge, and concluded Ms I must have knowingly shared her card details and security information with her daughter. Under the Payment Service Regulations 2017, when a cardholder knowingly shares card details and security information with someone else who completes a transaction using the agreed procedure, the transaction is authorised. Therefore, Vanquis acted reasonably in treating the claim as fraud rather than service not received, and was not obliged to pursue alternative remedies such as chargeback or Section 75 claims.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website