Not upheld: dispute handling, chargeback process, Section 75 Consumer Credit Act claim, vulnerable consumer support complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs F complained that Lloyds Bank failed to refund disputed transactions made to merchant G between July-September 2025, which she claimed were gambling transactions miscategorised as digital entertainment. She argued Lloyds should have pursued chargebacks, accepted a Section 75 claim, and identified her as vulnerable given the pattern of same-day transactions. Lloyds raised chargebacks which were defended by G on grounds that services were provided and used, and declined to pursue further. The ombudsman found Lloyds acted fairly as the merchant successfully defended the chargebacks, there was insufficient evidence of misrepresentation, the MCC used was not invalid, and Mrs F had not disclosed vulnerabilities or requested a gambling block. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Lloyds fairly declined to pursue chargebacks because the merchant successfully defended them by demonstrating services were provided and utilised. The MCC used (5816 for Digital Goods – Games) was not invalid as merchants may use broader entertainment and gaming codes. There was insufficient evidence to demonstrate misrepresentation or that the services were not skill-based. For Section 75, similar reasoning applied – no clear evidence of breach of contract or misrepresentation. The pattern of transactions alone did not require Lloyds to block payments absent fraud concerns or financial hardship indicators. Since Mrs F had not disclosed vulnerabilities or requested a gambling block, Lloyds was not obliged to take additional action.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website