Not upheld: payment processing failures and late payment fees complaint against PayPal UK Ltd

Decision detail

Summary

Mr G complained that PayPal failed to process multiple payments to his credit account, resulting in late fees, interest charges, and adverse credit file markers. Between December 2024 and August 2025, Mr G attempted numerous payments that were declined, primarily due to using a card that had been terminated in July 2024 and later due to currency mismatches. PayPal refunded five late payment fees totalling £60 after eventually identifying the currency issue on 8 September 2025. The ombudsman found PayPal was not at fault, as Mr G should have known his card was terminated and had alternative payment methods available, and he did not contact PayPal until 15 August 2025. The ombudsman upheld PayPal's £60 refund as fair compensation for not identifying the currency issue during the initial call.

The Ombudsman's reasoning

The ombudsman found that Mr G would reasonably have known his card ending *4340 was terminated on 19 July 2024, having received explicit notification. Mr G successfully used alternative payment methods after that date, demonstrating he had options available. There was no evidence Mr G attempted to contact PayPal or use alternative payment methods during the December 2024 to February 2025 period when payments failed. The ombudsman concluded PayPal was not at fault for the declined payments, as they resulted from either the terminated card being used or currency mismatches. However, PayPal's failure to identify the currency issue during the initial 15 August 2025 call justified the £60 refund already offered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website