Not upheld: Card / payment disputes complaint against Jaja Finance Ltd

Decision detail

Summary

Mr R complained that Jaja Finance unfairly refused his chargeback request for a £1,207+ gambling transaction that was processed by merchant H under MCC 7372 instead of the expected merchant S under MCC 7995. He argued the incorrect merchant code constituted misrepresentation under Visa rule 12.7 and that he was entitled to protection under section 75 of the Consumer Credit Act 1974. The ombudsman rejected both arguments, finding that Mr R failed to establish the transaction used an incorrect code, failed to provide evidence the correct code would have prevented it, and was not misled about the gambling nature of the service. Although Jaja Finance had incorrectly stated the card terms prohibited gambling, this error did not affect the chargeback decision outcome. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a three-part test for Visa rule 12.7 eligibility: (1) whether the merchant used an incorrect code, (2) whether the correct code would have prevented the transaction, and (3) whether the transaction was misrepresented. On the first criterion, the ombudsman found that MCC 7372 may have been appropriate for a merchant offering multiple services, and no evidence demonstrated it was fundamentally incorrect. On the second criterion, Mr R provided no evidence that transactions with the gambling MCC 7995 would have been refused on his account. On the third criterion, the ombudsman found no misrepresentation because Mr R was aware he was gambling and knew he was transferring funds for gambling purposes, even though the processing merchant differed from expected. The ombudsman also rejected the section 75 CCA claim on similar grounds. While acknowledging the error regarding the terms and conditions statement, the ombudsman found it did not impact the outcome of the chargeback decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website