Partially upheld: scam / unauthorised payments / chargeback handling complaint against Santander UK Plc

Decision detail

Summary

Mr S was scammed into providing his debit card details to a fraudster who made two payments (£891.99 and £392.61) to travel agencies without Mr S's knowledge or genuine consent. Mr S reported the scam to Santander, which refused to refund the payments, arguing they were authorised because Mr S had authenticated them in its app. The ombudsman found the payments were authorised under the Payment Services Regulations 2017, as Mr S completed the required authentication steps, even though he was deceived about the purpose of one payment. Consent under the PSRs is an objective test that does not require the consumer to be fully informed. However, the ombudsman upheld the complaint in part, awarding £100 compensation for Santander's poor handling of the chargeback process, during which it repeatedly requested evidence without adequately explaining why chargebacks were unlikely to succeed.

The Ombudsman's reasoning

Under the Payment Services Regulations 2017, authorisation depends on correct authentication and the consumer's consent. Consent is an objective test that does not require the consumer to be fully informed about the payment details. Although Mr S was deceived about the purpose of the £891.99 payment, the app screenshots show he would have clearly seen it was a payment for that amount before authorising it. Both payments were correctly authenticated using Mr S's card details and stronger authentication. Therefore, the payments were authorised and Santander was not obliged to refund them. However, Santander's handling of the chargeback process was poor - it repeatedly requested evidence without explaining why chargebacks were unlikely to succeed, causing Mr S frustration.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website