Not upheld: chargeback handling / dispute resolution complaint against Monzo Bank Limited

Decision detail

Summary

Mr H complained that Monzo unfairly handled his chargeback request relating to a £39 subscription charge from a tutoring platform (S). Mr H claimed he was charged immediately after checkout, contrary to S's terms which stated he would only be charged once a tutor accepted his lesson request. He also raised concerns about the tutor attempting to take him off-platform and misrepresenting pricing. Monzo raised the chargeback under the 'Goods or Services Not as Described or Defective' reason code, but after S defended the claim, Monzo decided not to proceed to arbitration. The ombudsman found Monzo acted fairly because the reason code was appropriate, and even if arbitration had occurred, the claim would likely fail since Mr H had not suffered a loss—he would have been charged the £39 regardless of when the charge was processed.

The Ombudsman's reasoning

The ombudsman found that the 'Goods or Services Not as Described or Defective' reason code was the most appropriate for Mr H's claims about misrepresentation and breach of contract terms. However, even if the chargeback had proceeded to arbitration, it would be unlikely to succeed because: (1) it is unclear what actually happened regarding the timing of the charge, as S's terms allow for payment to be held by the bank; (2) Mr H had not suffered a loss as he would have been charged £39 when the tutor accepted the request regardless; and (3) S's terms explicitly state S is not responsible for tutor-provided information, making the tutor's pricing discrepancy not a breach by S. The ombudsman noted that chargeback is limited to scheme rules rather than consumer protection law, and Monzo was not required to consider statutory consumer rights.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website