Not upheld: payment routing error and refund claim following failed home improvement contract complaint against Nationwide Building Society

Decision detail

Summary

Mr S paid £5,700 via Nationwide credit card for home improvements with Company A, but the payment was routed to Company B via a third-party processor. The project was not completed and work was substandard. Mr S claimed he did not authorise the payment because he did not know it was going to Company B. The ombudsman found the payment was authorised as Mr S instructed it to leave his account, and it fell outside APP fraud protections as it was a card payment. Chargeback and Section 75 claims were unlikely to succeed as the processor performed its contracted service and Mr S did not pay the companies directly. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that 'authorised' means the customer gave instruction for payment to leave their account, regardless of where it actually went. Therefore, this was an authorised payment. The payment was made by card, not bank transfer, so APP fraud reimbursement did not apply. A chargeback or Section 75 claim was unlikely to succeed because the third-party processor provided the service it was engaged for, and Mr S did not pay Company A or Company B directly. Nationwide was not at fault for processing the payment as it appeared legitimate and the amount was not suspicious.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website