Not upheld: scam and fraud - refund claim complaint against NewDay Ltd

Decision detail

Summary

Mr M, who was struggling financially, fell victim to an online investment scam and made a £900 payment via his NewDay credit card to the scammer. He disputed the payment and requested a refund from NewDay. NewDay considered a chargeback but found the circumstances did not meet the requirements for success and suggested Mr M pursue a Section 75 claim if he provided further information. The ombudsman found that NewDay was not required to intervene in the payment as it was to a new payee and not of significant value, and therefore did not uphold the complaint.

The Ombudsman's reasoning

While acknowledging Mr M fell victim to a cruel scam, the ombudsman found that NewDay was not required to intervene. The payment was to a new payee and was not of significant value, so it would not be reasonable to expect NewDay to stop and check every such payment. The ombudsman balanced the need to identify potentially fraudulent payments against minimising disruption to legitimate transactions. The scammer, not NewDay, bears responsibility for the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website