Not upheld: disputed transaction and customer service complaint against Nationwide Building Society

Decision detail

Summary

Miss B complained that Nationwide declined to refund a disputed taxi transaction of £419.06 made whilst abroad, which she believed should have cost around €22. The transaction exceeded her credit limit and followed other unusual account activity that day. Nationwide provided conflicting information about raising a dispute but offered £100 compensation for this customer service failure. The ombudsman found the transaction was authorised by Miss B using her genuine card and PIN, making her liable under payment regulations. Nationwide's chargeback attempt was reasonable and its decision to allow the transaction to exceed the credit limit was in line with industry practice. The complaint was not upheld, though the £100 compensation for customer service failures was upheld as reasonable.

The Ombudsman's reasoning

Under the Payment Service Regulations 2017, the payment service provider is liable only if the customer did not authorise the payment. Since Miss B authenticated the transaction by using her genuine card and correct PIN, she formally consented to it under the PSR definition of authorisation, regardless of the amount being different from her expectation. Nationwide fairly attempted recovery through the chargeback process and reasonably declined the Section 75 claim due to insufficient evidence of what was agreed at the time. Allowing transactions to exceed credit limits by a grace amount is common industry practice and not unreasonable. The transaction activity, whilst higher than usual, was not so remarkable as to require Nationwide to intervene given the use of genuine card and PIN.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website