Not upheld: Direct Debit Guarantee claim rejection / contractual dispute complaint against Bank of Scotland plc

Decision detail

Summary

Miss C complained that Bank of Scotland unfairly declined her request to recover direct debit payments made to energy broker E between 2020 and 2022, claiming the payments were made in error without valid consent or legal contract. Bank of Scotland rejected the claim as falling outside the Direct Debit Guarantee, which only covers specific payment errors and does not address contractual disputes. The ombudsman upheld Bank of Scotland's decision, finding that Miss C's complaint was fundamentally a contractual dispute with E rather than a matter covered by the guarantee, and that the evidence indicated the payments were made with her authority.

The Ombudsman's reasoning

The ombudsman found that the Direct Debit Guarantee only covers specific circumstances such as incorrect dates or wrong amounts, and cannot be used to address contractual disputes between customer and merchant. The ombudsman concluded that Miss C's claim was fundamentally a contractual dispute with E, not a matter covered by the guarantee. Additionally, the ombudsman found that the number of direct debit payments over several years, combined with Miss C's manual payments to E during the same period and her failure to challenge the payments at the time, indicated the payments were made with her authority.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website