Not upheld: refund claim - chargeback and section 75 dispute complaint against MBNA Limited

Decision detail

Summary

Mr R booked a package holiday with company J using his MBNA credit card for £2,683.53 and subsequently paid £513.37 directly to the hotel for a room upgrade using a different card. Mr R claimed the upgrade was misrepresented and that the hotel had various deficiencies including loose fittings and water supply interruptions. When J declined to refund him, Mr R asked MBNA to pursue a chargeback or section 75 claim. MBNA declined both avenues. The ombudsman found MBNA acted fairly because the upgrade was not funded by the MBNA card (placing it outside section 75 protection), any chargeback would have had no reasonable prospect of success under Visa rules since Mr R stayed the full duration, and there was insufficient evidence of breach of contract or misrepresentation by J regarding the original package holiday.

The Ombudsman's reasoning

The ombudsman found that MBNA acted fairly because: (1) a chargeback would not have had reasonable prospect of success since the upgrade was not paid for using the MBNA card and Mr R stayed the full duration; (2) under Visa rules, chargebacks for services not as described only apply to unused portions, and Mr R used the entire stay; (3) the upgrade formed a separate contract between Mr R and the hotel, not with J, so J cannot be held responsible for any misrepresentation about the upgrade; (4) regarding the original package holiday with J, there was insufficient evidence of breach of contract or misrepresentation - the issues raised (loose fittings, water outages) constituted general wear and tear or temporary inconveniences rather than breaches; (5) J's offer of complimentary meals was a goodwill gesture, not an admission of breach; (6) section 75 protection only applies to the MBNA-funded transaction with J, not the separate hotel upgrade.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website