Not upheld: Card / payment disputes complaint against Monzo Bank Limited

Decision detail

Summary

Ms G purchased an online product for £205.46 that she believed was not fit for purpose and requested a chargeback from Monzo. Monzo raised the chargeback and temporarily credited her account, but the merchant provided a detailed defence and Monzo decided not to pursue the matter further, resulting in the funds being re-debited after 14 days' notice. Ms G complained that this caused her serious financial difficulties including risk of homelessness. The ombudsman found that chargebacks are a voluntary scheme operated by Mastercard with no obligation for card issuers to pursue them, and that Monzo properly handled the matter in accordance with the rules, so the complaint was not upheld.

The Ombudsman's reasoning

Chargebacks are a voluntary scheme operated by Mastercard, not a legal right or guaranteed refund method. Card issuers like Monzo have no obligation to raise chargebacks and decisions are based on card scheme rules, not the merits of the underlying dispute. Monzo properly raised the chargeback, considered the merchant's defence, and was not wrong in deciding not to pursue further representation or arbitration given the merchant's robust response. The 14-day notice before re-debiting was appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website