Not upheld: declined transaction and inadequate customer communication complaint against AMERICAN EXPRESS SERVICES EUROPE LIMITED

Decision detail

Summary

Mr P complained that AESEL unfairly handled a declined transaction for approximately £7,437 after he successfully completed SafeKey authentication. He claimed he was not warned that authentication alone did not guarantee authorisation and that he lost membership rewards and travel insurance benefits as a result. AESEL declined the transaction because the merchant failed to include SafeKey authentication data in the final authorisation request, in compliance with PSD2 regulations. The ombudsman did not uphold the complaint, finding the failure was caused by a merchant-side technical issue outside AESEL's control, that AESEL was not responsible for proactively communicating the failure, and that information about potential transaction failures was already available on AESEL's website.

The Ombudsman's reasoning

The ombudsman found that the transaction failure was caused by a merchant-side technical issue during the SafeKey process, not an error by AESEL. AESEL was not responsible for proactively communicating the failure to Mr P in real time, as the failure occurred at the point of sale with the merchant and should have been apparent during the sales process. The ombudsman rejected the argument that AESEL should have warned Mr P that authentication alone does not guarantee authorisation, noting that information about potential transaction failures was already available on AESEL's website and that it is not reasonable to expect AESEL to pre-emptively set out every scenario where a transaction may decline. Additionally, AESEL's account terms explicitly excluded liability for losses when a retailer does not accept the card.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website