Not upheld: chargeback handling and failure to identify vulnerability complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss Q complained that HSBC failed to support her as a vulnerable customer and improperly declined to pursue chargebacks for approximately £23,260 in transactions made through an online gaming app between June and September 2024. She argued the app misrepresented skill-based games as gambling products and that HSBC should have identified her vulnerability based on the unusual spending pattern and repeated overdraft usage during a period when she was experiencing significant personal difficulties. HSBC declined to pursue chargebacks, stating it had no chargeback rights for gambling-related transactions. The ombudsman found HSBC acted fairly because there was insufficient evidence under Visa chargeback scheme rules to demonstrate a successful claim, and while acknowledging Miss Q's vulnerability, found HSBC had taken reasonable steps by contacting her about unusual activity and receiving confirmation the transactions were authorised.

The Ombudsman's reasoning

The ombudsman concluded that HSBC acted fairly in declining to pursue chargebacks because there was insufficient evidence to demonstrate that a chargeback claim would have had reasonable prospect of success under the relevant Visa scheme rules. While Miss Q argued the services were misrepresented as skill-based games when they were actually gambling, the ombudsman found no evidence from the merchant or regulator to support this, and noted that Visa has stated there is no chargeback for any form of gambling. Regarding vulnerability, although the ombudsman acknowledged Miss Q's difficult personal circumstances, HSBC was not informed of her vulnerability at the time and had taken reasonable steps by contacting her about unusual activity and receiving confirmation the transactions were authorised. The ombudsman found that the spending pattern alone, without additional information, did not require HSBC to intervene further.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website