Not upheld: chargeback handling and refund recovery complaint against Santander

Decision detail

Summary

Mr C purchased a flight ticket for a colleague through an online travel agent using his Santander credit card. The passenger was denied boarding by the airline, which advised the refund should come through the travel agent. Santander raised a chargeback, but the travel agent defended it by stating the passenger was a 'no show' and citing booking terms and conditions. Although Mr C later received evidence that both the airline and travel agent had agreed to a refund, Santander did not pursue the chargeback further due to the merchant's defence and Mastercard scheme rules limiting resubmission. The ombudsman found Santander acted fairly in its handling of the chargeback and reasonably declined to pursue a Section 75 claim, as the booking was in the passenger's name rather than Mr C's.

The Ombudsman's reasoning

The ombudsman assessed whether Santander acted fairly in declining to pursue the chargeback and in not considering a Section 75 claim. For the chargeback, the ombudsman found that Santander appropriately raised it under the 'Goods or Services not provided' condition based on information available at the time. When M defended the chargeback citing the 'no show' status and relying on terms and conditions showing the airline could refuse carriage without necessarily providing a refund, Santander had a reasonable basis for deciding there was no reasonable prospect of success. The ombudsman noted that evidence of a refund being approved came after the chargeback had been raised and defended, and that Mastercard rules only permit one chargeback submission per transaction. For Section 75, the ombudsman found it was fair for Santander not to consider this claim because the booking was in the passenger's name, not Mr C's, meaning a debtor-creditor-supplier agreement was not properly in place.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website