Not upheld: Card / payment disputes complaint against New Wave Capital Limited trading as Capital on Tap

Decision detail

Summary

P, a limited company, complained that Capital on Tap unfairly refused to raise a chargeback for a £545 price difference on a £4,095 holiday booking after Mr W (P's director) was allegedly misled about price and cancellation guarantees. Capital on Tap declined the chargeback request, explaining that VISA scheme rules require the service to be cancelled to claim a refund for the unused portion, and Mr W had not cancelled the holiday. The ombudsman upheld Capital on Tap's decision, finding that the chargeback claim did not meet the strict VISA scheme requirements and that Capital on Tap was not obligated to pursue a claim with no reasonable prospect of success under the applicable rules.

The Ombudsman's reasoning

The ombudsman determined that chargebacks are governed by strict VISA scheme rules that are prescriptive and only allow refunds in narrow circumstances. The key requirement for the applicable reason codes is that the service must be cancelled to claim a refund for the unused portion. Since Mr W did not cancel the holiday and explicitly stated he still wanted to go on it, the claim did not meet the chargeback criteria. Capital on Tap was not obligated to raise a chargeback that had no reasonable prospect of success under the scheme rules. The ombudsman clarified that chargeback decisions are based on scheme rules, not the merits of the dispute with the merchant or fairness considerations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website