Not upheld: chargeback claim handling - alleged unfair refusal to pursue chargeback complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr D purchased clothing online for £76.90 and requested cancellation after the goods had shipped, but before delivery. The retailer refused to cover return costs, requiring Mr D to return goods to an overseas warehouse at his own expense. Mr D complained to Tesco Bank, claiming the retailer had misrepresented same-day shipping and UK location. Tesco Bank declined to raise a chargeback, concluding the claim had no reasonable prospects of success under Mastercard rules. The ombudsman upheld Tesco Bank's decision, finding that while Mr D may have a valid legal claim against the retailer, chargebacks are limited to specific dispute categories that his claim did not fit, and Tesco Bank correctly applied the relevant chargeback rules.

The Ombudsman's reasoning

The ombudsman found that Tesco Bank correctly applied Mastercard chargeback rules by determining Mr D's claim did not fit the available reason codes with reasonable prospects of success. The 'refund not processed' reason code did not apply because R had not refused an agreed refund (the goods were in transit) and R was willing to accept returns, merely declining to pay return costs. The 'goods not as described' reason code did not apply because the goods themselves were not misdescribed, and the reason code does not cover misrepresentations about shipping location or timescales. While Mr D may have a valid legal claim against R under consumer protection legislation, chargebacks are limited to specific dispute categories set by the card scheme, and disputes falling outside those categories cannot be pursued even if the consumer has a strong legal claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website