Not upheld: fraud claim and chargeback refusal related to unlicensed gambling transactions complaint against NewDay Ltd

Decision detail

Summary

Miss R complained that NewDay Ltd refused to refund money she lost to an unlicensed online casino, claiming the casino was operating fraudulently. She had won money but could not withdraw it due to the casino's lack of UK licensing. NewDay declined to raise a chargeback citing gambling transaction exclusions. The ombudsman found the complaint not upheld because Miss R's payments were authorised and consented to, the payment pattern showed no clear indicators of fraud requiring intervention, and any chargeback would have had no reasonable prospect of success since she received the gambling services she paid for.

The Ombudsman's reasoning

Although Miss R provided convincing evidence that the casino was unlicensed, the key question was whether NewDay breached its obligations. Since Miss R authorised the payments and was not defrauded in the traditional sense, she is presumed liable in the first instance. While firms should monitor for fraud and unusual transactions, the payment pattern here (low individual values, spread over days, modest daily totals) did not present reasonable indicators of financial harm that NewDay should have detected. Additionally, any chargeback would have lacked reasonable prospect of success because Miss R received what she paid for - gambling services - even though she could not withdraw winnings.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website