Not upheld: Card / payment disputes complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Mrs W purchased a defective wedding hat for £535 and raised a chargeback dispute with Virgin Money after the merchant refused to provide a proper refund or repair. Virgin Money initially raised a chargeback and provided a temporary credit, but declined to pursue it further when the merchant defended the claim, citing that Mrs W had retained and altered the hat rather than returning it. The ombudsman upheld Virgin Money's decision, finding that under Mastercard scheme rules the chargeback had no reasonable prospect of success and that Virgin Money fairly removed the temporary credit once the merchant challenged it.

The Ombudsman's reasoning

The ombudsman concluded that Virgin Money acted fairly because: (1) as a debit card transaction, Mrs W had no rights under Section 75 of the Consumer Credit Act 1974, making chargeback the only available route; (2) the chargeback had no reasonable prospect of success under Mastercard scheme rules because Mrs W retained and altered the hat rather than returning it, and the merchant had offered to make alterations; (3) Virgin Money properly informed Mrs W that the temporary credit could be removed and fairly debited it once the merchant defended the chargeback; (4) Virgin Money provided support when aware of Mrs W's financial difficulties.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website