Not upheld: section 75 claim handling and chargeback dispute; claim handling and communication failures complaint against Clydesdale Bank PLC trading as Virgin Money

Decision detail

Summary

Ms R paid £4,000 for a wellbeing programme abroad using her Virgin Money credit card and subsequently claimed the money back citing misrepresentation about regulatory licensing and breach of contract regarding poor service quality. Virgin Money raised a dispute and chargeback but declined to pursue the claim further after the provider defended it, citing insufficient evidence of misrepresentation and breach of contract. The ombudsman found Virgin Money's decision not to uphold the claim was fair because the evidence was inconclusive and subjective, and even if upheld, a full refund would not have been reasonable. However, the ombudsman acknowledged Virgin Money's claim handling had deficiencies including communication failures and delays, and found the £200 compensation offered to be appropriate for these procedural failings.

The Ombudsman's reasoning

The ombudsman found that while Virgin Money's claim handling had deficiencies, the underlying decision not to uphold the section 75 claim was fair because: (1) the evidence of misrepresentation was not conclusive - while the website claimed full certification, no specific licence number or registration reference was displayed, and it was unclear if such details were required; (2) the evidence of breach of contract regarding service quality was insufficient and largely subjective, with Ms R unable to provide conclusive proof of poor care, unqualified staff, or failure to perform with reasonable care and skill; (3) the provider being based abroad created additional complications regarding applicable standards and jurisdiction; (4) even if the claim had been upheld, a full refund would not have been reasonable as Ms R received some value from the services; (5) the chargeback process similarly lacked sufficient supporting evidence to succeed under card scheme rules. The ombudsman acknowledged communication failures and delays in handling but found the £200 compensation appropriate for these procedural failings.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website