Not upheld: chargeback handling - declined claim for refund complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mr R paid £96.53 for a non-refundable hostel booking via NatWest debit card but needed to cancel due to unforeseen circumstances. The hostel declined to refund, so Mr R requested a chargeback. NatWest raised the chargeback but declined to progress it after the hostel provided evidence of the non-refundable terms. The ombudsman found NatWest acted fairly because under Mastercard scheme rules, a customer-initiated cancellation due to changed personal circumstances does not constitute grounds for a successful chargeback, and the non-refundable terms were clearly communicated before booking. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Mastercard chargeback scheme rules, which require evidence of specific failures such as goods/services not provided, faulty goods, wrong amount charged, or agreed refund declined. The ombudsman found that none of these conditions were met: the transaction was correctly processed with Mr R's consent, the non-refundable terms were clearly communicated before booking, H fulfilled their contractual obligations by providing the accommodation, and the cancellation was customer-initiated due to changed personal circumstances rather than a service failure. A change in personal circumstances does not create a chargeback right under the scheme rules. Therefore, NatWest reasonably concluded there was no reasonable prospect of Mastercard ruling in Mr R's favour.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website