Not upheld: unauthorized transactions / disputed payments complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Ms Y complained that NatWest declined to refund 26 disputed credit card transactions totaling an unspecified amount between 6 May and 7 June 2025. Ms Y claimed her PIN was obtained via shoulder surfing on 22 April 2025 and her card was subsequently stolen. NatWest verified that the transactions were properly authenticated using either Ms Y's correctly-entered PIN or contactless payment with her card present. The ombudsman found the transactions were authorized by Ms Y or someone she knows, as the alleged fraud scenario was atypical (14-day delay before use, no attempt to maximize funds, spending patterns consistent with Ms Y's history). The complaint was not upheld and NatWest was not required to provide a refund.

The Ombudsman's reasoning

The ombudsman applied The Payment Service Regulations 2017 and Section 83 of the Consumer Credit Act 1974, which establish that banks are liable for unauthorized transactions but customers are liable for authorized ones. The ombudsman found the transactions were properly authenticated (correct PIN entry and card presence for contactless). On the issue of consent, the ombudsman concluded on the balance of probabilities that Ms Y or someone she knows authorized the transactions because: (1) the alleged scenario of PIN compromise via shoulder surfing on 22 April followed by card theft, then a 14-day delay before use, is atypical of fraud patterns; (2) an unauthorized third party would typically use the card immediately to avoid it being blocked; (3) the transactions were not maximized and matched Ms Y's previous spending patterns; (4) the PIN was never entered incorrectly, making guessing implausible; and (5) Ms Y provided no evidence of sharing her PIN.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website