Not upheld: chargeback handling and Section 75 claim assessment complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Mr J paid approximately £11,000 towards a property purchase in September 2023 but claimed the allocated property was not the one promised and sought a refund. Virgin Money initiated a chargeback under the 'credit not processed' reason code, which proceeded to final arbitration where the card scheme ruled in favour of the merchant. Virgin Money also declined Mr J's Section 75 claim on the grounds that the total property purchase price exceeded £30,000, the financial limit for such claims. The ombudsman found that Virgin Money properly followed chargeback procedures and correctly applied Section 75 criteria, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Virgin Money properly followed chargeback procedures by taking the dispute to final arbitration, where the card scheme made the decision. The ombudsman determined that the reason code selected was reasonable based on information provided by Mr J, and that a different reason code would likely not have changed the outcome. Regarding Section 75, the ombudsman concluded the claim was properly declined because the property purchase price far exceeded the £30,000 financial limit, and the payment was clearly documented as a deposit towards that purchase, not a standalone transaction. The ombudsman also found that Section 56 did not apply as negotiations occurred with a broker rather than the supplier directly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website