DRN-3119122

The complaint

Mrs S is unhappy Tesco Personal Finance PLC t/a Tesco Bank won’t refund a payment
made on her credit card to a supplier online.

What happened

In October 2020, Mrs S’ son bought a mobile phone from an online supplier, who I’ll refer to
as “Q”, for £409.99. This payment was made using Mrs S’ Tesco Bank credit card.
Mrs S said her son attempted to cancel this purchase when the mobile phone didn’t arrive
after ten days. Mrs S says her son received an email confirming the refund, however, she’s
never received the money.

Mrs S contacted Tesco Bank to see if they could help her get the money back. Tesco Bank
looked into Mrs S’ concerns, but they didn’t think they could help. They thought there wasn’t
a valid claim under Section 75 of the Consumer Credit Act 1974 (CCA) as they said the
necessary debtor-creditor-supplier arrangement wasn’t in place. Tesco Bank also
considered whether Mrs S would have been able to get her money back under the
chargeback rules. However, Tesco Bank said Mrs S was out of time to raise a chargeback
claim – the latest she could’ve raised a claim was 7 February 2021, but the first time she’d
contacted Tesco Bank to raise her concerns was 4 March 2021. So, they weren’t able to
help Mrs S.

Mrs S said she spent about four hours talking to Tesco Bank staff about her Section 75
claim, but that they weren’t very helpful. Tesco Bank told us they’d already dealt with this
complaint point under a separate reference and they identified Mrs S didn’t receive the level
of service they’d have expected. So, Tesco Bank gave Mrs S £100 compensation on 14 April
2021.

Our Investigator looked into Mrs S’ concerns. In relation to a Section 75 claim, our
Investigator felt Tesco Bank had handled Mrs S’ claim fairly as she said there wasn’t the
necessary debtor-creditor-supplier arrangement in place for a valid Section 75 claim. In
relation to making a chargeback claim, our Investigator agreed with Tesco Bank that Mrs S
was out of time for a claim to be made. Our Investigator also felt the £100 offered by Tesco
Bank for the customer service Mrs S received was fair and reasonable. So, she didn’t ask
Tesco Bank to do anything more.

Mrs S disagreed. In summary, she said she’d heard of other people in a similar situation who
had money refunded from their credit card company. And also, the reason she didn’t raise a
chargeback claim in time was because she hadn’t heard of it and only thought she could
raise a Section 75 claim. So, the complaint has been passed to me.

What I’ve decided – and why

I’ve considered all the available evidence and arguments to decide what’s fair and
reasonable in the circumstances of this complaint.
Mrs S told us she knows of other people who have been in similar situations to hers and they
have been able to get their money back from their credit card provider. I appreciate Mrs S’
frustrations, but I’m only able to look into the specific circumstances of her complaint.

Mrs S accepts she gave her son her credit card to use in order to make this transaction and
she hasn’t disputed not knowing the amount her son was paying for the mobile phone.
Taking everything into account I’m satisfied the transaction was properly authorised by Mrs
S and correctly applied to Mrs S’ credit card account by Tesco Bank.

Chargeback

In certain circumstances, when a cardholder has a dispute about a transaction, as Mrs S

I don’t think Tesco Bank could have challenged the payment on the basis Mrs S didn’t
properly authorise the transaction, given the conclusion that I’ve already set out above.
Under the scheme rules relevant to Mrs S’ dispute, she had 120 days from either the
transaction date or when Mrs S or her son became aware there was a problem, to submit a
chargeback claim. Tesco Bank have said they didn’t think a chargeback claim was likely to
succeed because Mrs S raised her concerns with them on 4 March 2021 – which was
outside of 120 days.

Having looked at the order invoice, I can see it says the mobile phone was to be dispatched
within 7 to 10 working days from 10 October 2020 – which was the transaction date. Mrs S
says her son became concerned after ten days when the phone hadn’t been delivered and
tried to cancel the transaction at that point. However, Mrs S first contacted Tesco Bank on 4
March 2021. This falls outside of the 120 days from the date of the transaction and also from
when Mrs S and her son became aware there was a problem ten days after making the
purchase. So, I don’t think Tesco Bank acted unfairly by not raising a chargeback claim.

I understand Mrs S has said she hadn’t heard of a chargeback claim and didn’t know she
could raise one. However, if Mrs S contacted Tesco Bank for their help sooner, I would’ve
expected Tesco Bank to discuss Mrs S’ options with her in how she could attempt to get her
money back. So, I don’t think it would have been necessary for Mrs S to know what a
chargeback claim was nor to specify that she wanted Tesco Bank to attempt a chargeback
claim in order to get her money back.

Section 75

I’ve next gone on to consider whether Tesco Bank handled Mrs S’ Section 75 claim fairly.
In certain circumstances, Mrs S has an equal right to claim against Tesco Bank as she does
against the supplier (Q) if there’s been a breach of contract or misrepresentation by the
supplier if certain conditions are met.

My role isn’t to decide Tesco Bank’s liability under Section 75. Instead, as statute requires
me to, I need to decide what’s fair and reasonable, taking into account any relevant law,
such as the Consumer Credit Act 1974 (CCA). For a valid claim under Section 75 there must
be a debtor-creditor-supplier arrangement in place. This often looks like:

 A debtor (who makes repayments to the creditor for the borrowing for the
purchase)
  A creditor (who has to send the borrowed amount direct to the supplier)
 A supplier (who has to provide what was purchased to the debtor)
This means the person who paid for the goods (Mrs S) should have a contractual
relationship with the company who supplied the goods (Q) as well as with the credit provider
(Tesco Bank).

Tesco Bank say the necessary debtor-creditor-supplier relationship doesn’t exist in this case.
They say this was because the credit card used to make the payment was Mrs S’ but the
mobile phone order invoice was between Q and Mrs S’ son.

Having looked at the available evidence, I can see the payment for the mobile phone was
made using Mrs S’ Tesco Bank credit card and her bank statement shows £409.99 was
debited from her account. However, the invoice order for the mobile phone was addressed to
Mrs S’ son. Mrs S confirmed the mobile phone was to be used by her son and that he was
giving his old phone to her to use. Based on this, I think it’s reasonable to believe Mrs S had
no benefit nor use of the mobile phone that her son bought from Q.

Overall, while the payment for the mobile phone was made using Mrs S’ credit card, I’m
satisfied there was no contract between Mrs S and Q. And she didn’t have the requisite
relationship with Q.

As I do not think there is a valid debtor-creditor-supplier relationship in these circumstances,

Customer service

I appreciate Tesco Bank have said they already dealt with Mrs S’ customer service concerns
and paid her £100 compensation. For completeness, I won’t be asking Tesco Bank to pay
Mrs S any more compensation. While I appreciate Mrs S would have been caused
inconvenience and concern, I think the £100 Tesco Bank have offered Mrs S is fair in the
circumstances.

I understand Mrs S feels strongly about what’s happened here and I appreciate my decision
will likely come as a disappointment to her. But having carefully thought about everything, I
won’t be asking Tesco Bank to do anything more.

My final decision

For reasons explained above, my final decision is that I do not uphold this complaint.

Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs S to accept or
reject my decision before 19 May 2022.

Leanne McEvoy
Ombudsman