Upheld: unfair direction to refund / improper handling of flagged transactions complaint against Paymentsense Limited (trading as Dojo)

Decision detail

Summary

H, a limited company, sold goods for £50,000 to a customer via five card transactions through their Dojo payment account. Dojo flagged the transactions as unusual and after Mr A provided invoice details, he was directed to refund the customer. H was unable to recover payment from the customer and complained to Dojo about being charged fees on the refunded transactions. The ombudsman upheld the complaint, finding Dojo's direction to refund was unfair given the goods had already been delivered and there was no guarantee of alternative payment. Dojo was ordered to reimburse the £50,000 less ordinary fees, plus 8% interest and £250 compensation.

The Ombudsman's reasoning

While Dojo was entitled to scrutinise unusual transactions and end the relationship, suggesting a refund after goods were already delivered was inappropriate and unfair. The suggestion placed H at considerable loss with no guarantee the customer would pay by alternative means. H's consistent explanation and supporting evidence did not suggest wrongdoing. Reimbursement is appropriate as H followed Dojo's suggestion and cannot recover the funds.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website