Not upheld: Card / payment disputes complaint against Metro Bank PLC

Decision detail

Summary

Mr M purchased herbal supplements online for £412.85 and requested a refund the same day due to medical reasons. The retailer offered a return process but the parcel was held at customs requiring payment of customs charges. Mr M did not pay the charges or collect the parcel, and it was returned to the sender. When the retailer refused a refund, Metro raised a chargeback under the 'goods not received' reason code. Metro discontinued the chargeback after the retailer defended it, concluding it had no reasonable prospects of success. The ombudsman upheld Metro's decision, finding that Mastercard's rules do not permit chargebacks for goods held in customs for unpaid fees, and that alternative reason codes were unsuitable given the circumstances and lack of supporting evidence.

The Ombudsman's reasoning

The ombudsman applied Mastercard's chargeback rules and found that the 'goods or services not received' reason code does not apply where goods are held in customs for unpaid duties or fees. Since Mr M did not pay the customs charges and the goods were available for collection but remained uncollected, the chargeback claim had no reasonable prospects of success under the applicable scheme rules. Alternative reason codes (misdescription/defect or refund not processed) were also found to be unsuitable given the lack of evidence that goods were returned to the retailer's address and the retailer's clear return policy. The Consumer Duty does not override scheme rules and does not require a card issuer to pursue claims without reasonable prospects of success.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website