Not upheld: unauthorized/fraudulent transaction - recovery and chargeback complaint against Barclays Bank UK PLC

Decision detail

Summary

Ms B paid £820 via her Barclays debit card through a money transfer provider (W) to purchase religious crosses from an overseas merchant. The merchant requested additional payment claiming a moulding error, which Ms B suspected was a scam and refused. Ms B never received the goods or a refund and sought reimbursement from Barclays. Barclays declined, stating the chargeback could not succeed because W (the merchant) had fulfilled its service. The ombudsman upheld Barclays' position, finding the payment was authorized, contained no unusual features to trigger fraud detection, and a chargeback against W would not have been successful since W had completed its service by transferring the funds.

The Ombudsman's reasoning

The ombudsman found that Ms B had authorized the payment to a legitimate money transfer provider, and under the Payment Service Regulations 2017, she remained responsible for it. The payment amount of £820 was not unusual or remarkable, there were no multiple payments in quick succession, and the payment was to a legitimate retailer rather than a high-risk provider like a cryptocurrency exchange. Therefore, Barclays had no reasonable grounds to flag the payment for additional checks or to suspect Ms B was at risk of financial harm. Additionally, a chargeback claim would not have been successful because the chargeback would be against W (the merchant), which had fulfilled its service by transferring the funds as requested.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website