Not upheld: chargeback claim handling and refusal complaint against J.P. Morgan Europe Limited trading as Chase

Decision detail

Summary

Mr M complained that Chase unfairly declined his chargeback claim for £1,148.63 paid to an airline ticket merchant for flights he wished to cancel. Mr M argued Chase failed to apply consumer protection standards and should have considered the merchant's aggressive commercial practices and breach of consumer rights legislation. The ombudsman found that chargeback disputes are assessed under card scheme rules rather than external legislation, and since Mr M was informed of the cancellation policy at purchase, Chase was not unreasonable in declining the claim as it did not meet Mastercard's strict chargeback conditions. The complaint was not upheld, and the ombudsman noted Mr M could pursue legal action against the merchant separately.

The Ombudsman's reasoning

The ombudsman determined that chargeback disputes are reviewed under card scheme rules rather than external legislation. The relevant Mastercard chargeback rules require that when a merchant informs a cardholder of its refund policy at purchase, the cardholder must abide by that policy. Since Mr M was informed of the cancellation policy and the core service (flights) was available, Chase was not unreasonable in declining the chargeback as it did not meet the strict terms and had no reasonable prospect of success. Consumer protection legislation, while potentially applicable to the underlying merchant contract, does not need to be considered by Chase when assessing chargeback eligibility.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website