Bank of Scotland plc · DRN-6245745

The complaint Mr R complains Bank of Scotland plc, trading as Halifax (‘Halifax’) did not raise a dispute to recover a credit card payment he made for a hire vehicle, and declined his claim under Section 75 of the Consumer Credit Act 1974 (S75 of the CCA). What happened I issued my provisional findings to both parties setting out why I did not think Mr R’s complaint should be upheld, and invited both parties to provide any further evidence and / or submissions in reply to my provisional decision. The background to this complaint was set out in my provisional decision together with my provisional findings, which are included below and now form part of this final decision. Background On 4 August 2025 Mr R booked a hire vehicle for while he was on holiday. Mr R used an online booking company ‘K’ to arrange the hire vehicle, and paid K £890.35. The vehicle was supplied by ‘A’. When Mr R arrived to pick up the vehicle on 7 August 2025 the vehicle he had booked was not available. Mr R was presented with an alternative, but it was not within the same grouping of vehicle as he had booked. In the absence of any other options, Mr R took the alternative vehicle and raised his concerns with K after the vehicle was returned on 18 August 2025. K reviewed what had happened, and as an exception offered Mr R a refund valued at £44.51 to be used for future bookings through their various online services. Mr R did not think this went far enough to remedy things and so brought the matter to Halifax to recover the difference in cost between the two vehicles. Halifax told Mr R he did not have a valid chargeback for them to be able to raise the dispute. They then declined Mr R’s claim under S75 of the CCA because they concluded there was no debtor-creditor-supplier (DCS) agreement in place as payment had been made to K, and not to A – the end supplier. Our Investigator considered the case and did not uphold Mr R’s complaint. They said no chargeback rights existed for Mr R’s case given the proposed partial remedy by K, and they said based on the available evidence there was no DCS agreement - a condition under a S75 claim. Mr R strongly disagreed. In summary, he said K had accepted payment, arranged the booking, issued the voucher and so supplied the service. Mr R likened K’s responsibility to that of travel intermediaries. Mr R also said K’s offer was not a valid remedy under Mastercard so it did not extinguish chargeback rights. Lastly, Mr R said he had used the

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alternative vehicle under protest so it was not an acceptance of the breach that had taken place. Provisional findings I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’ve included only a summary above of what’s happened, and my findings are focused on what I consider relevant to reaching a fair and reasonable decision, but I assure both parties I have reviewed what evidence and submissions have been made available. To reach a fair and reasonable decision I’ve taken into account any relevant law and regulations, regulator’s rules, guidance and standards, codes of practice and (where appropriate) what is considered to have been good industry practice at the relevant time. At the heart of Mr R’s complaint is that he was not provided with the hire vehicle he expected to have, and he is seeking a refund of some sort to recognise this. As Mr R purchased the service using his credit card, Halifax had two mechanisms open to them to consider recovering some or all of the funds Mr R had paid - chargeback and a S75 claim. Chargeback Chargeback is governed by the card scheme provider’s set of rules (in this case Mastercard) so it is not for Halifax or this service to say how the card scheme should run their chargeback. Halifax explained Mr R did not have a valid chargeback and I’ve considered whether, given what Halifax knew about what had happened, together with the card scheme provider’s rules, it was fair of Halifax to not raise a dispute. Having done so, I think in the circumstances Halifax acted fairly. A chargeback must be raised under a particular reason code. In this case Halifax considered the reason code for “Goods or Services were Either Not as Described or Defective”. In the circumstances I think Halifax were fair to consider this chargeback reason most fairly aligned with Mr R’s case. A condition of raising this chargeback is that the merchant has refused to adjust the price, repair or replace the goods or other things of value, or issue a credit. In Mr R’s case K offered to issue a form of credit. And while I recognise Mr R considers K’s offer immaterial, I think it was fair for Halifax to have considered the offer, in conjunction with the card scheme provider’s rules, when deciding whether to raise a chargeback on Mr R’s behalf. Halifax are under no obligation to raise a chargeback – it is not a legal right. It would be considered good practice for a card issuer to raise a chargeback where there is a reasonable prospect of success. In this case, if the chargeback was to reach arbitration – the final stage of chargeback where the card scheme provider decides the matter – it seems reasonable in this case for Halifax to have considered it unlikely the card scheme provider would have found in Mr R’s favour given the relevant rules and K’s offer. Taking the above into account I’ve therefore not seen enough here to say Halifax acted

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unfairly in their handling of the dispute based on the evidence and submissions they had available at the time. Section 75 S75 of the CCA gives a legal right for the account holder to claim against their credit card issuer in respect of breaches of contract or misrepresentations by a supplier of goods or services, so long as certain conditions have been met. These conditions include that a debtor-creditor-supplier (DCS) agreement exists, and that the claim falls within the financial limits set out under S75 of the CCA. I’ve considered whether, given what’s happened, Halifax acted fairly when they declined Mr R’s claim due to it not meeting the condition of having a DCS agreement in place. I have given this careful consideration based on the evidence and submissions that appear to have been available to Halifax during the course of their claims handling. Having reviewed the evidence Halifax appear likely to have had available to them, it is not disputed that a payment for the hire vehicle was paid directly to K (£890.35). I have however noted K’s booking confirmation referenced a further payment as part of the booking (£130.35) which needed to be paid on pick-up. But it is not clear what this was for or who it was to be paid to, and if it was paid, who paid it. And I’ve noted a payment of £11.73 was paid to A when Mr R dropped off the vehicle on 18 August 2025. Given the limited evidence Halifax appears to have had at the time of considering the claim, it does not appear that it would have been straightforward for Halifax to establish whether the requisite DCS - to have A as the supplier – was in place. But this does not mean that no DCS agreement existed given Mr R did make a payment to K in relation to this hire vehicle agreement and used K’s booking platform to access A’s hire vehicle service. In the circumstances, I therefore think it would have been fair for Halifax to have considered this DCS agreement and whether there was any recourse against K for their involvement in this chain of events. Although given the limited evidence available, and noting that K offers services by itself and on behalf of Operators, there is a question about what the scope of K’s service to Mr R was on this occasion. I’ve considered Mr R’s submissions that K should be recognised as the supplier here, and that Mr R has likened his case to other cases considered by our service where a DCS agreement has been established for a travel agent to take responsibility for suppliers. However, it is important to note that our service considers each case on its own merits, but also it may help Mr R to note that it is “The package Travel and Linked Arrangements Regulations 2018” (PTRs) that are relevant in such cases, and I’ve not seen that the PTRs would apply here to establish the DCS agreement Mr R is seeking to make between him (as the debtor), Halifax (as the creditor) and ultimately A (as the supplier). However, even if the requisite DCS agreement was established, I’ve not seen enough to say that Halifax could have fairly found in Mr R’s favour in the way that he wants, as I’ll explain. Where a DCS agreement has been established (and other S75 claim conditions have been met) the next step would be to consider whether any breach of contract or misrepresentation has taken place. At this point it may help to set out that a breach of contract is recognised where goods have not been of satisfactory quality and where services have not been performed with

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reasonable care and skill. And a misrepresentation is recognised as a false statement of fact which induces a consumer to enter into an agreement, and the consumer suffers a loss because of the misrepresentation. Based on the evidence and submissions available to Halifax during their handling of the claim, it is apparent that K’s website – when selecting a vehicle to hire – makes clear the individual is booking the described vehicle “or similar”. Clicking on the information icon on the website it is explained what is meant by “similar” vehicles. The information here says “Vehicles are usually categorized based on their functions, sizes, and number of seats. Please note that the stores cannot guarantee that the exact model of your choice will be available for you to pick up. In some cases, you may be provided with a similar or upgraded model..”. The Frequently Asked Questions (FAQs) section on K’s website answers the question of whether a specific make, model or colour of vehicle can be reserved. K’s response says: “If there is a ‘Model Guaranteed’ disclaimer, then yes you can reserve your preferred model. Otherwise, the vehicles displayed online are just examples and we cannot guarantee the exact make, model, or color of the vehicle. However, you can choose the vehicle type, seating capacity, transmission, and boot space. The model of vehicle you will receive will depend on availability in the rental supplier’s fleet upon pick up”. K confirmed, via email to Mr R, that he had booked a particular vehicle brand and model, that it was a seven-seater, able to accommodate three pieces of luggage, was an automatic and had air-conditioning. The email also said the booking was for this specific vehicle or a similar vehicle. It is not disputed that on arrival at the pick-up location A was unable to supply the specific vehicle Mr R had selected and that he was given a vehicle from a different grouping of vehicles. Both K’s website and A’s own website categorise the two vehicles into different vehicle groups. So I think it would have been reasonable for Halifax to recognise Mr R had not been given either the vehicle he reserved or something from the same class of vehicle, therefore indicating a breach had occurred. I’ve no doubt Mr R was disappointed by not having his preferred choice of vehicle for his holiday, and that he has told us it meant some of his travel plans changed given he could not access certain campsites due to the difference in what terrain the respective vehicles could access. However, there is no evidence to show that while Halifax were considering the claim Mr R provided evidence to show he was prevented from doing certain things during his trip because of the type of vehicle he had. And I think it would have been reasonable of Halifax to note that Mr R was not prevented from going on his trip, and the alternative vehicle Mr R was provided with accommodated seven-passengers, three pieces of luggage, included air-conditioning and was most likely automatic given the majority of vehicles on K’s website are described as such. So a lot of the key features of the vehicle were similar to Mr R’s original reservation. I note that Mr R is seeking a refund of some sort to settle this matter, and it is apparent that looking at the two vehicles online there was likely some difference in price here, but I’m not aware that Mr R presented any evidence of a difference in cost to Halifax.

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In the absence of any evidence to suggest otherwise, I therefore don’t think it would have been unreasonable for Halifax to have considered the offer and - using rough information from K’s website to see what the difference in cost may have been – to have concluded the sums as not too dissimilar. Overall, I think Halifax could have more fairly handled the claim for Mr R by considering more carefully K’s role in these events but, that said, even if Halifax were to have accepted K had more responsibility here (and I’m not saying that K did) there is nothing to support a misrepresentation had taken place, and although Mr R did not get a class of vehicle he expected, the service was used, a vehicle with a number of similarities to the one Mr R had reserved was provided, Mr R was able to take his trip and K had made an offer to recognise the problem that had occurred. I’ve therefore not seen enough to persuade me that Halifax acted unfairly in their handling of the chargeback or that if they’d reasonably looked further into the S75 claim that this would have changed things given the evidence and submissions that were available to them at the time of handling the claim. Responses to my provisional decision Halifax replied to my provisional decision to say they had nothing further to add. Mr R responded to my provisional decision with further submissions including: • That Mr R contacted K about the problem with the vehicle during the rental period and that he was told a refund could only be considered once completed. • Screenshots from K’s booking platform to show the difference in pricing between the two different categories of vehicles, with his original choice of vehicle being significantly more expensive. Mr R said this demonstrated they were not vehicles of equivalent value. • Details of a campsite reservation whilst using the alternative vehicle to show that the trip involved campsite travel and outdoor locations which the original vehicle was better suited to. Mr R also said K’s offer in K’s currency to be used through their platform was not a genuine or financial remedy for the service which wasn’t provided as it cannot be withdrawn or refunded to the original payment method. As both parties responded to my provisional decision before the deadline set, I’ve now reviewed the matter once more. 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. I recognise this matter is important to Mr R and I assure him I’ve given careful consideration to what he has said, however, as I’ll explain, what I’ve seen is not enough to persuade me to depart from the outcome I reached in my provisional decision. Mindful that there is still the question of whether the requisite DCS agreement is in place to put K in the shoes of A as the end supplier, even if the requisite DCS agreement was accepted as being in place and acknowledging Mr R did not receive a vehicle from the same

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vehicle grouping as is shown and categorised on K’s and A’s websites, I don’t think it would have been unreasonable for Halifax to conclude – based on the evidence and submissions brought forward – that there was nothing more to award Mr R in this matter. I assure Mr R I’ve considered his points that he felt there was no other choice available to him having only discovered the vehicle he wanted wasn’t available on arrival, and I’ve noted what he has said about his engagement with K during the rental period – but as I set out in my provisional decision, there was no guarantee that he would get the vehicle described in his booking confirmation when he arrived to collect it. And the alternative vehicle held a number of functional similarities to the one Mr R had reserved (number of passenger seats, baggage storage, air con, automatic), Mr R was able to take his trip still and K had made an offer to recognise what had happened. I’ve considered what Mr R has said about the difference in cost between the two vehicles, but the evidence he has provided is general and not specific to what actually happened. I noted in my provisional decision that the booking confirmation referenced that Mr R was required to pay a further £130.35 on pick up, but Mr R has not made any reference to paying this and I’ve noted in Mr R’s submissions he has said he paid “£890.35 for a specific class of vehicle”. So I think it fair to note the possibility that Mr R did not pay the additional £130.35. But even if I accept Mr R did pay the additional £130.35 - so a total of £1,020.70 was paid by Mr R for the hire vehicle – K’s website shows the alternative vehicle Mr R was provided with can cost around £89 per day, which would equate to a total of around £979. So as noted in my provisional decision that difference is not too dissimilar to K’s offer. Mr R submitted an example of a vehicle from the original vehicle grouping costing £121 per day (this was not the actual vehicle Mr R had selected). But at this rate, this would have cost around £1,300 for the same period of time that Mr R was hiring the vehicle for and therefore more than what he paid, even if I accept the £130.35 was included. I’ve also considered Mr R’s point about K’s offer being in K’s retail currency and I don’t think it would have been unreasonable for Halifax to have considered this fair in the absence of any evidence to suggest otherwise (particularly as establishing the breakdown of K’s service is not straightforward), and noting that it was more likely than not that the money paid had been passed to A for the hire of the vehicle. I am in no doubt that Mr R was disappointed due to not having the vehicle that he wanted and I am mindful that the daily price of a hire vehicle can vary. My findings are not to be difficult, but I’m considering here whether Halifax fairly handled the claim. And even though I think there was scope for Halifax to have given the claim further consideration in relation to K’s contractual responsibility with Mr R (again, I’m not saying that K did have responsibility for the supply of the vehicle), even if Halifax accepted the requisite DCS agreement was in place, given the above I don’t think it would have been unreasonable for Halifax to have considered declining the claim in any event based on the available submissions. My final decision For the reasons above, my final decision is that Mr R’s complaint is not upheld. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 21 April 2026. Kristina Mathews

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Ombudsman

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