Not upheld: chargeback claim handling / refund denial complaint against Starling Bank Limited

Decision detail

Summary

Miss K purchased medication for £323.99 using her Starling debit card but claimed it was defective due to improper temperature storage during delayed delivery. The merchant initially agreed to provide a replacement if Miss K returned the medication, but subsequently refused, claiming doses were missing. Starling declined to raise a chargeback, stating Miss K had not provided evidence of a promised refund. The ombudsman found that Starling acted fairly because the circumstances did not meet the strict conditions of applicable Mastercard chargeback rules and the claim would have had no reasonable prospect of success, as the merchant would likely have defended vigorously and Miss K could not have provided the necessary expert evidence or proof of return.

The Ombudsman's reasoning

The ombudsman considered two potential chargeback rules: 'Goods or Services Were Either Not as Described or Defective' and 'Credit Not Processed'. Under the first rule, although the goods may have been defective, the merchant had agreed to provide a replacement, which is one of the conditions that must be met for a chargeback to succeed. Under the second rule, the circumstances did not clearly fit as the merchant had agreed to a replacement subject to return of goods, not already satisfied with a return and offering a refund that then failed to materialise. The ombudsman concluded that based on the merchant's likely vigorous defence and Miss K's inability to provide expert evidence that the goods were defective or proof that they were returned unused, the chargeback would have had no reasonable prospect of success. The ombudsman noted that chargeback is not a legal right and card schemes do not generally resolve complex disputes requiring expert witnesses.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website