Not upheld: scam/fraud - refund claim for unauthorised payment complaint against Nationwide Building Society

Decision detail

Summary

Mr K paid £993.27 via credit card to what he believed was a genuine travel agent to purchase airline tickets for his mother, but the scammer used the funds to purchase tickets for an unknown third party. When Mr K discovered the fraud, Nationwide raised a chargeback claim which was defended by the genuine airline merchant showing the tickets were issued and utilised. Nationwide also rejected Mr K's Section 75 claim on the basis that no valid debtor-creditor-supplier relationship existed. The ombudsman upheld Nationwide's position, finding the transaction was authorised, the chargeback could not succeed under scheme rules, and Section 75 did not apply because Mr K had no contractual relationship with the genuine airline supplier.

The Ombudsman's reasoning

The ombudsman found the transaction was authorised because Mr K authenticated the payment and consented to it, even though he was deceived about what he was agreeing to. Authorisation under PSRs depends on correct authentication and consent, not informed consent. The chargeback claim could not succeed because the genuine merchant defended it by showing the tickets were issued and utilised. Section 75 did not apply because there was no valid debtor-creditor-supplier relationship - Mr K had no contractual relationship with the genuine airline (the actual supplier), only with the scammer. The chargeback scheme and Section 75 are designed to resolve legitimate disputes, not to refund victims of scams.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website