Not upheld: unfair decline of chargeback and Section 75 claim complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Miss M paid a £175 deposit for a driving course on 1 August 2025 but requested a refund on 14 August 2025 after claiming she had not been allocated an instructor. The merchant declined the refund citing non-refundable deposit terms in its conditions. Virgin Money declined Miss M's claim for assistance, and the ombudsman upheld this decision. The ombudsman found that neither a chargeback dispute nor a Section 75 claim would have had reasonable prospects of success, as the merchant's terms were clearly communicated before payment and the merchant subsequently allocated an instructor, fulfilling its contractual obligations.

The Ombudsman's reasoning

The ombudsman found that Virgin Money was not obliged to raise a chargeback dispute as it would not have had reasonable prospects of success under the relevant reason codes. Regarding Section 75, no breach of contract or misrepresentation occurred because the merchant fulfilled its contractual obligations by allocating an instructor and the terms regarding the non-refundable deposit were clearly communicated before payment. The ombudsman could not hold Virgin Money responsible for the merchant's contract terms, though Miss M could pursue claims against the merchant separately under consumer legislation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website