Not upheld: chargeback handling - failure to raise dispute complaint against HSBC UK Bank Plc (trading as first direct bank)

Decision detail

Summary

Mr R paid £404 directly to a jet-ski company for claimed damage while abroad, after initially booking through a separate booking agent. The jet-ski company claimed to have no insurance and refused to provide receipts. When Mr R sought recovery through his bank first direct, they declined to raise a chargeback dispute. The ombudsman found first direct acted fairly in applying card scheme rules, as Mr R's circumstances did not satisfy the requirements for any available chargeback reason code, including 'Charges for Loss, Theft or Damage' (separate merchants), 'Unreasonable Amount' (transaction outside EEA and amount was specified), and 'Addendum Dispute' (different merchants involved).

The Ombudsman's reasoning

The ombudsman found that first direct fairly applied the card scheme provider's rules when declining to raise a chargeback. Mr R's circumstances did not satisfy the requirements for any available reason code: the 'Charges for Loss, Theft or Damage' code required the damage charge to be in the same transaction as the initial service (but Mr R paid the booking agent separately from the jet-ski company); the 'Unreasonable Amount' code did not apply to transactions outside the EEA and Mr R had agreed to the specified amount; and the 'Addendum Dispute' code did not apply as Mr R transacted with two different merchants. First direct was bound by the scheme rules and fairly considered the most closely related reason codes before concluding the dispute was unlikely to succeed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website