Not upheld: unauthorised payment / disputed transaction complaint against Lloyds Bank PLC

Decision detail

Summary

Ms W complained that Lloyds Bank held her liable for a £3,000 payment she claimed was unauthorised, taken by merchant S for a course deposit in July 2025. Ms W said she had only agreed to two smaller payments totalling £1,300 and that Lloyds should have notified her of the larger payment and refunded it under the Consumer Credit Act 1974 or section 75. Lloyds raised a chargeback claim which S disputed by providing evidence of Ms W's consent, audit information showing she received course-related emails, and terms requiring refund requests within 14 days—a deadline Ms W missed. The ombudsman found the payment was authorised based on the balance of probabilities, considering the authentication details, proximity to accepted payments, S's evidence, and Ms W's subsequent messages, and concluded Lloyds reasonably declined the chargeback and did not breach section 75 obligations.

The Ombudsman's reasoning

The ombudsman applied the legal test that cardholders are liable for authorised payments but not unauthorised ones. On the balance of probabilities, the ombudsman found the payment was authorised because: (1) it was authenticated correctly with Ms W's correct details; (2) it was taken in close proximity to two smaller payments Ms W accepts authorising; (3) S's audit evidence showed it sent Ms W messages detailing the charges; (4) Ms W's subsequent messages about the course suggested she had initially agreed to it; and (5) S provided witness statements corroborating consent. The ombudsman found it reasonable for Lloyds not to intervene before processing the payment as it presented no clear fraud risk, and reasonable not to pursue the chargeback claim further given S's evidence and the 14-day cancellation term Ms W missed. Section 75 liability was not established as Ms W failed to demonstrate S made a misrepresentation that induced the payment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website