Not upheld: refund claim - chargeback and Section 75 Consumer Credit Act complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Mr P paid £1,028.86 via his Halifax credit card to crowdfunding platform K to back a robotic lawnmower project. When the project creator halted production in July 2025 without delivering the lawnmower, Mr P requested a refund from Halifax. Halifax rejected the chargeback claim and stated there was no valid Section 75 claim because the payment went through K, not the project creator directly, breaking the debtor-creditor-supplier agreement. The ombudsman upheld Halifax's decision, finding that K's terms of use clearly stated it was not responsible for project performance and that backers were pledging rather than purchasing, making a chargeback unlikely to succeed and Section 75 inapplicable.

The Ombudsman's reasoning

The ombudsman found that Halifax acted fairly in not pursuing the chargeback to arbitration because K's defence was strong - the terms of use clearly stated K was not responsible for project performance and that backers were pledging, not purchasing. Regarding Section 75, the ombudsman agreed there was no debtor-creditor-supplier agreement because K was not the supplier of the lawnmower. Even if such an agreement existed, there was no breach of contract or misrepresentation by K, as K's terms explicitly stated projects were not guaranteed and backers were not making purchases.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website