Not upheld: chargeback handling, dispute resolution, customer service failures complaint against Barclays Bank UK Plc trading as Tesco Bank

Decision detail

Summary

Mrs P purchased a defective used car in January 2025 using her Tesco Bank credit card and requested a refund when the merchant refused to accept rejection. Tesco Bank initially considered a Section 75 CCA claim but rejected it due to the invoice being in her husband's name, then raised a chargeback in April 2025. The merchant disputed the chargeback with evidence relating to a different car, leading to arbitration in July 2025, which the card scheme provider ruled in Mrs P's favour in September 2025. Mrs P complained about poor communication, delays, and being left with the car after the chargeback was upheld. The ombudsman found that while Tesco Bank made service errors, the £4,750 refund plus £425 in additional payments (deposit, compensation, road tax, and repairs) fairly reflected the outcome and impact of its failures.

The Ombudsman's reasoning

The ombudsman found that while Tesco Bank made errors in customer service and could have initiated the chargeback sooner, the ultimate financial outcome was fair. The chargeback was properly processed and upheld by the card scheme provider, resulting in the £4,750 refund. Although a Section 75 CCA claim might have provided additional remedies (such as taking possession of the car), there were concerns about whether such a claim would have been valid given the invoice was in the husband's name. The additional payments offered (£250 deposit, £66.94 road tax, £560.28 repairs, and £150 compensation) fairly reflected the losses Mrs P could evidence and the impact of Tesco Bank's service failures. The ombudsman could not hold Tesco Bank responsible for card scheme processing delays or require it to take possession of the car, as the chargeback outcome meant the car remained the merchant's property.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website