Not upheld: Disputed transaction / Unauthorised payment handling complaint against Zilch Technology Limited

Decision detail

Summary

Miss U complained that Zilch failed to dispute a £59.95 payment she claimed was unauthorised. Miss U had a monthly membership with business L and attempted to cancel in September 2025 but was incentivised to continue. When L charged her account on 29 October 2025, Miss U contacted L the next day to cancel and request a refund. Zilch advised that a 14-day waiting period was required before it could assist with a chargeback dispute. Before this period elapsed, L agreed to refund Miss U the £59.95, and Zilch also refunded the associated transaction fee. The ombudsman found that the transaction was authorised at the time it was taken because Miss U had not cancelled her membership prior to the charge, and therefore Zilch acted fairly in not raising a chargeback dispute.

The Ombudsman's reasoning

The ombudsman found that Miss U had an active and agreed membership with L at the time the payment was debited on 29 October 2025, as she had not cancelled prior to that date despite attempting to do so in September. Although Miss U contacted L the next day (30 October 2025) to cancel, the payment had already been authorised and taken. Therefore, Zilch was not unreasonable in not treating the transaction as unauthorised. Additionally, under Visa chargeback rules, a 15-day waiting period must pass before a dispute can be raised. Since Miss U obtained a refund directly from L before this period elapsed, Zilch had no further obligation to act. The fact that Zilch also refunded the associated fee as a gesture of goodwill further supported that it acted fairly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website