Nationwide Building Society · DRN-5990360

The complaint Miss K has complained Nationwide Building Society mishandled a claim for money back. What happened The parties are familiar with the background details of this complaint – so, I’ll only briefly summarise them here. It reflects my role of resolving disputes quickly with minimum formality. Miss K bought a hydro facial treatment from a company who I’ll refer to as R. She paid £165 using her Nationwide debit card. Miss K says she asked R for a refund as she decided she no longer wanted to go ahead with the treatment. But R declined to give Miss K any money back. So, Miss K asked Nationwide to raise a chargeback for the disputed amount as she says she tried to contact R to cancel the order within the 48-hour cancellation period. Nationwide raised a chargeback under Visa dispute condition 13.1: Merchant/Services Not Received. R defended the claim saying, ‘All items and purchases are non-refundable’ and this was clearly stated in the consent form – which Miss K had signed at the point of sale. However, R said they had, ‘issued the customer with a voucher or credit’. Nationwide informed Miss K that given the evidence supplied by R they’d decided to close the chargeback as they thought it was unlikely Visa would find in her favour if they asked for a final arbitration ruling. Miss K accepted the outcome on the basis R had refunded the disputed amount to her. But Miss K got back in touch with Nationwide saying she hadn’t received any refund – the money hadn’t been credited to her account by R. Nationwide declined to reopen the chargeback. So, Miss K raised a complaint about this and the way Nationwide had handled the matter. Nationwide responded by saying they had processed the chargeback correctly. Unhappy with Nationwide’s final response she asked the Financial Ombudsman to consider the matter. Our Investigator upheld the complaint. In summary, they thought Nationwide ought reasonably to have changed the dispute condition to 13.6 – Credit Not Processed. The Investigator also believed the available evidence supported Miss K hadn’t received the promised refund. So, they thought there was a good chance Visa would have found in Miss K’s favour had they been asked to make a final arbitration ruling. So, the Investigator recommended Nationwide refund the disputed £165 to Miss K and pay her a distress and inconvenience payment of £100. Miss K accepted the Investigator’s findings. But Nationwide did not, saying, in summary, that R had provided evidence to support they didn’t offer refunds, but it appeared that as a gesture of goodwill they had provided Miss K with a voucher(s) rather than a credit to her card account. I issued a provisional decision on the matter, where I set out the below:

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A ‘chargeback’ is a way for a debit or credit card provider (Nationwide) to reclaim money from the merchant’s (R’s) bank where there are certain problems with the purchase of goods or services by a consumer (Miss K). It isn’t a legal right and there’s no guarantee the card provider will be able to recover the money this way. It’s a voluntary scheme and the process must follow the scheme rules. As Miss K’s card was issued under the Visa brand, the Visa chargeback rules apply here. The scheme rules are written by Visa. Nationwide must follow the rules – which are strict, and time limits apply. The rules allow the merchant to either accept the dispute or provide evidence in defence of the chargeback. If an amicable conclusion can’t be reached, it’s Visa who decides the outcome of the dispute – not Nationwide. What I need to decide here is whether Nationwide processed the chargeback correctly and in a timely manner. Based on what I’ve seen, I think Nationwide did do so. I’ll explain why. How Nationwide handled/processed the chargeback Having listened to a recording of the initial call Miss K made to Nationwide (with support from her mum), I appreciate why Nationwide initiated the chargeback using Visa dispute condition 13.1 (merchant/services not received) given the paid for treatment hadn’t been provided. However, it was also disclosed during the conversation that Miss K had made R aware she didn’t want to go ahead with the treatment, but R had declined to give her any form of refund. So, I think condition code 13.6 (credit not processed) would have been a better choice. This is used when a customer has returned the merchandise or cancelled a service, but the merchant has failed to issue a refund within a reasonable timeframe (or at all). R provided evidence to support all items and purchases are non-refundable. This sales policy was also highlighted by the consultation form Miss K signed. It stated, ‘No refunds will be issued unless the client is medically unable to continue the treatments, in which case a doctor’s letter must be supplied’. Miss K says she believed she could cancel the treatment within 48 hours of her paying for it. But I’ve not seen anything to show R told Miss K this. R’s sales policy does mention a 48- hour cancellation period. But this relates solely to an appointment that’s been made for the treatment to take place. The condition says R, ‘require 48 hours’ notice to reschedule or cancel all appointments’. I think it’s fair to say this condition doesn’t relate to R saying the paid for treatment package can be cancelled within 48 hours of purchase and a full refund will be provided. Miss K hadn’t booked a date for the treatment to take place. But if she had, she would have needed to let R know 48 hours in advance if she wanted to cancel or rearrange it – otherwise a penalty charge (of £100) may be incurred. Even had Nationwide raised the chargeback using dispute condition 13.6 (instead of 13.1), I’m satisfied it’s more likely than not that R would have still defended the claim and provided the same evidence. And based on the available evidence, I think it was reasonable for Nationwide to conclude it didn’t support Miss K was entitled to any refund. So, in turn, I consider Nationwide acted fairly when deciding not to proceed any further with the chargeback at the point they made this decision. I agree it was unlikely Visa would have found in Miss K’s favour had they been asked to make a final arbitration ruling.

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Having said the above, R indicated in their defence that they had made a refund to Miss K, with R saying they had refunded the full disputed transaction amount (of £165). R’s submission also said, ‘we have issued the customer with a voucher or credit’. Miss K’s bank statements show her Nationwide account didn’t receive a credit from R. So, I appreciate why Nationwide thought the refund was likely made in the form of a voucher. Miss K has said she hasn’t received any cash payment or vouchers from R. But based on what I’ve seen, I don’t think Nationwide acted unfairly when concluding the evidence didn’t support that R had promised to pay the refund via a credit to Miss K’s card account. I also think it was reasonable for Nationwide to want to see more to support Miss K hadn’t received any vouchers from R. Nationwide was in a difficult position – they had R saying the refund had been paid to Miss K and Miss K saying they hadn’t. Nationwide doesn’t regulate R – nor does the Financial Ombudsman. This means Nationwide has no control or influence over the actions undertaken by R. Nationwide also doesn’t make the decision on whether a chargeback is successful or not – that ruling is made by the scheme provider, which on this occasion is Visa. The available evidence supports R didn’t have to make a refund to Miss K in the first instance. But it appears they chose to do so as a gesture of goodwill by giving Miss K a voucher, although I appreciate Miss K says she hasn’t received it. Perhaps, if Miss K hasn’t done so already, she could get in touch with R to say she hasn’t received any refund by means of a credit to her card account or voucher. In the circumstances, I think Nationwide acted fairly when deciding to close the chargeback when they did and when subsequently deciding not to reopen it. So, I don’t intend to direct Nationwide to take any further action in relation to this complaint. Based on what I’ve seen, I think Nationwide processed the chargeback in line with the scheme rules and in a timely manner without any undue delays. The responses to my provisional decision Miss K responded by saying, in summary: • the provisional decision didn’t take account of her vulnerabilities. • the provisional decision made no mention of Nationwide’s obligations under Consumer Duty - especially with regards to foreseeable harm. • that Nationwide should have asked Visa to make an arbitration ruling as she maintains it’s likely they would have ruled in her favour. • the chances of success would have been increased had Nationwide used dispute condition 13.6 instead of 13.1. • she’s made both Nationwide and the Financial Ombudsman aware on multiple occasions that she hasn’t received any vouchers from R and we’re in effect asking her to prove a negative - which is very hard to do. • Nationwide provided little support and poor service throughout the chargeback process, and she believes she should be compensated for this. Nationwide responded by saying they didn’t have any additional information to add at this point.

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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. Miss K has made several detailed points in her complaint including in the submissions she’s provided in response to my provisional decision. But in my decision, I don’t intend to refer to everything or address every point made. I mean no discourtesy by this, instead I will focus on what I see as being the key outstanding points, and the reasons for making my decision. I’d like to thank Miss K for sharing with the Financial Ombudsman her vulnerabilities. I’ve taken these into account as part of my review of our case file. Among other things, the Financial Conduct Authority (FCA) Consumer Duty requires a regulated business to treat vulnerable customers with care, and ensure easy, barrier-free access to the complaints process. I’ve not seen anything which would lead me to conclude there was any failing by Nationwide in how they processed the chargeback and Miss K’s subsequent complaint. I think they kept Miss K reasonably informed about what was happening and responded to received information within a reasonable period. I also think it’s fair to say Nationwide was consistent when explaining to Miss K why they weren’t going to take the chargeback to the next stage. The Consumer Duty also requires a business to act in good faith, avoid causing foreseeable harm and enable and support retail customers to pursue their financial objectives. But it doesn’t guarantee that individual customers will always get good outcomes – or protect them from poor outcomes. I’m satisfied Nationwide took account of what Miss K had told them. To help her achieve a ‘good outcome’ Nationwide agreed to raise a chargeback. As it’s a voluntary scheme, Nationwide could have chosen not to do so. In my provisional decision I explained why I didn’t think the outcome would have been any different had it been raised using Visa dispute condition 13.6 instead of 13.1. I remain of the view it’s likely R would have provided the same evidence irrespective of what dispute condition the chargeback had been raised under and the same outcome would have been reached. I appreciate Miss K believes she should get all her money back because she doesn’t want to go ahead with the treatment (or any other treatments provided by R) and she sought to cancel it soon after she’d paid for it. However, in my provisional decision, I explained why I think the evidence is persuasive in showing that R didn’t need to make any refund to Miss K. Miss K hasn’t provided any further information or evidence which would lead me to change my thoughts on this. While the evidence supports R didn’t need to make any form of refund to Miss K, in their defence to the chargeback R said they had made one – with R saying ‘we have issued the customer with a voucher or credit’. Miss K’s statements show R hasn’t made any credit to her account with Nationwide. And I’ve no reason to disbelieve Miss K when she says she hasn’t received any vouchers. However, as I explained in my provisional decision, I think it was reasonable for Nationwide to want to see more to show this – such as something to show Miss K had contacted R to make them aware she hadn’t received either a credit or vouchers and some form of acknowledgment and response from R. For the reasons I’ve set out above, I remain of the view it was reasonable for Nationwide to have concluded it was unlikely Visa would have ruled in Miss K’s favour given the scheme rules and the information that was available to Nationwide at the time. So, I consider the decision Nationwide made to not progress the chargeback to the next stage was fair. I’ve

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also not seen anything which would lead me to conclude Miss K received an inappropriate or poor level of service from Nationwide with regards to how they processed the chargeback and subsequent complaint or there were any failings by Nationwide in relation to Consumer Duty. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss K to accept or reject my decision before 23 April 2026. Carl Bibby Ombudsman

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