Not upheld: chargeback handling and dispute resolution; fairness of chargeback fees complaint against Stripe Payments UK Ltd

Decision detail

Summary

R, an events company, complained that Stripe Payments UK Ltd unfairly debited its account after a chargeback was upheld against it. R had provided evidence of a customer attending an event, but the card issuer upheld the customer's chargeback claim for $230 plus fees. R sought refunds of these losses and wanted Stripe to take action against the card scheme provider. The ombudsman found that Stripe did not make the chargeback decision—that was the card issuer's and scheme provider's role—and that Stripe properly forwarded R's evidence as part of its standard process. The ombudsman concluded Stripe acted reasonably and was not obligated to cover chargeback losses, so the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Stripe does not operate the card scheme or decide chargeback outcomes; these decisions are made by the card issuer and scheme provider. Stripe's role is limited to defending chargebacks by forwarding merchant evidence for consideration. The ombudsman noted that Stripe followed its process in line with its terms and conditions, and that it would be unreasonable to hold Stripe responsible for the card issuer's decision or to expect Stripe to cover chargeback losses. The ombudsman also found that arbitration would likely have produced the same outcome since the scheme provider had already considered the evidence.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website