Partially upheld: chargeback handling and complaint handling deficiency complaint against Zilch Technology Limited

Decision detail

Summary

Mr C complained about Zilch's handling of over 30 chargeback requests related to gift card purchases from a third-party merchant after he lost access to his account. Zilch raised chargebacks using appropriate codes, but the merchant defended the claims with evidence showing the gift cards had been accessed and used, leading to most claims being lost. The ombudsman found Zilch's chargeback handling reasonable but upheld the complaint regarding poor complaint handling, including inconsistent communication, emails not being received, and lack of clarity about why claims were unsuccessful. The ombudsman ordered £200 compensation for distress and inconvenience caused by the deficient complaint handling.

The Ombudsman's reasoning

The ombudsman found that Zilch correctly applied chargeback guidelines and reasonably did not pursue claims further after the merchant provided evidence that gift cards had been accessed and used. However, Zilch's complaint handling was deficient. The ombudsman noted that emails were not received by intended recipients, information about unsuccessful claims was not clearly communicated, and inconsistent responses were provided. While acknowledging the complexity created by over 30 chargeback requests, the ombudsman concluded Zilch could have improved service by assigning a single representative and providing clearer communication. The temporary nature of pre-credits was adequately explained in correspondence, so reversals were not unreasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website