Not upheld: Card / payment disputes complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr A complained about Tesco Bank's handling of a refund claim for a £500 vehicle deposit paid by credit card. The supplier declined the refund, citing its 7-day cancellation window which had passed. Mr A sought both a chargeback and a Section 75 claim. The ombudsman found Tesco Bank acted fairly in declining the chargeback as there were no reasonable grounds under Mastercard rules, and in declining the Section 75 claim as the total vehicle purchase price of £37,075.50 exceeded the £30,000 statutory limit. The complaint was not upheld, though the ombudsman accepted that Tesco Bank's £25 compensation for delay in considering the claim was fair.

The Ombudsman's reasoning

The ombudsman found that Tesco Bank correctly declined the chargeback claim because the Mastercard 'Credit Not Processed' code required either non-response, a broken promise to refund, or non-disclosure of refund policy. Here, the supplier actively declined the refund and had clearly disclosed its 7-day refund window, so there were no reasonable grounds for the chargeback. For the Section 75 claim, the ombudsman determined the relevant cash price was the total vehicle purchase price of £37,075.50, not just the £500 deposit, as the documents showed a single contract for vehicle purchase. Since this exceeded the £30,000 statutory limit for Section 75 protection, the claim fell outside the scope of the legislation. The £25 offered for the delay in considering the claim was deemed fair as the delay did not affect the outcome.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website