Bank of Scotland plc trading as Halifax · DRN-5982466

The complaint Mr D has complained about the way Bank of Scotland plc trading as Halifax dealt with his claim for money back in relation to a transaction he made using his credit card. What happened The circumstances of the complaint are well known to the parties so I’m not going to go over everything again in detail. But, to summarise, Mr D paid around £3,600 over separate transactions to a booking platform I’ll call “B” for accommodation abroad to be used for a week in August 2025. The booking was made by Mr D’s wife through her account with B for 11 guests that included Mr D. Mr D said when arriving at the property there were several issues including the jacuzzi not working; broken and dangerous furniture; a non-functioning outdoor fridge; and a broken washing machine. Mr D said the issues created both safety risks and disruption for the group and made it impossible to enjoy the holiday. Mr D put in a claim with B. B refunded Mr D around £1,000 but he sought a full refund. When B declined, Mr D contacted Halifax to put in a claim. Mr D said Halifax initially incorrectly told him no dispute could be raised, which it later admitted was wrong and paid £80 compensation. But it declined his claim for a further refund. Mr D disagreed and decided to refer his complaint to the Financial Ombudsman. One of our investigators looked into things but didn’t make any recommendations. Mr D didn’t agree. He said, in summary, Halifax wrongly concluded section 75 of the Consumer Credit Act 1974 didn’t apply. He said he was the debtor that paid the supplier so there was a link between the relevant parties. He said B meets the supplier criteria. He said section 75 mirrors the claimant’s claim and it shouldn’t be apportioned by headcount. He reiterated Halifax mishandled the claim and sought a full refund with interest and compensation. As things weren’t resolved, the complaint has been passed to me to decide. 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 want to acknowledge I’ve summarised the events of the complaint. I don’t intend any discourtesy by this – it just reflects the informal nature of our service. I’m required to decide matters quickly and with minimum formality. But I want to assure Mr D and Halifax that I’ve reviewed everything on file. And if I don’t comment on something, it’s not because I haven’t considered it. It’s because I’ve concentrated on what I think are the key issues. Our powers allow me to do this. I also want to say I’m very sorry to hear Mr D felt let down with the accommodation. I appreciate it cost a significant sum. I can’t imagine how he must have felt, but I thank him for taking the time to bring the complaint.

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What I first need to consider is whether Halifax – as a provider of financial services – has acted fairly and reasonably in the way it handled Mr D’s request for getting money back. It’s important to note Halifax isn’t the supplier. I’ve gone on to think about the specific card protections that are available. In situations like this, Halifax can consider assessing a claim under section 75 of the Consumer Credit Act 1974 or raising a chargeback. Section 75 is a statutory protection that enables Mr D to make a like claim against Halifax for breach of contract or misrepresentation by a supplier paid by credit card in respect of an agreement it had with him for the provision of goods or services. But there are certain conditions that need to be met for section 75 to apply. I think the transaction falls within the right financial limits. There also needs to be a debtor-creditor-supplier (DCS) agreement in place. Having multiple parties involved such as the host and other guests can impact the arrangement. In this case there’s not just Mr D, Halifax and B involved. His wife made the booking with B. And the accommodation was provided by another party. One of the conditions for a claim to be considered under section 75 is that the borrower (debtor) needs to have used the credit to pay the same company which they have a like claim against for breach of contract or misrepresentation. Facilitating a payment for something doesn’t necessarily mean the payer has the same contractual rights with the supplier as the contracting party does, if that party is someone else. In this case, Mr D is the debtor and so under section 75 he’d be the one who’d need to have a claim against B (or potentially the accommodation supplier) for breach of contract or misrepresentation. But it was his wife that booked and was named on the invoice. I think B thought it was dealing with Mr D’s wife in making the booking. So I think Halifax may have had valid concerns whether the necessary conditions between the parties existed. Given Mr D wasn’t the person that made the booking through B or was on the invoice I think Halifax may have fairly considered the necessary conditions for a DCS agreement weren’t in place. If B operates by having a lead booker that contracts on behalf of the rest of the party, I don’t think Mr D could therefore be considered a lead booker because he didn’t make the booking. And even if guests (including Mr D) had their own individual contractual rights with B I think their claim would be limited to the portion of the service they used themselves. Given Mr D has received around 30% back of the booking but he was part of a larger party, I don’t consider there’d be grounds to direct Halifax to pay more for any perceived breach of contract – even had the DCS agreement been intact for his portion of the services. Therefore, I don’t think Mr D had the direct relationship between himself, Halifax and B (or the accommodation provider) that would’ve enabled him to seek a 100% price reduction, even if I were to find that would be fair, which I think would have been unlikely in the circumstances because the service was provided, albeit I take the point Mr D said an important part of it for him was not provided with reasonable skill and care. So overall, I don’t find Halifax was unfair not to uphold the claim under section 75. The chargeback process provides a way for a card issuer to ask for a payment to be refunded in certain circumstances. The chargeback process is subject to rules made by the relevant card scheme. It’s not a guaranteed way of getting money back. While it’s good practice for a card issuer to attempt to chargeback where certain conditions are met and there’s some prospect of success, there are grounds or dispute conditions set by the relevant card scheme that need to be considered. If these are not met, a chargeback is unlikely to succeed. And something going wrong with a merchant won’t always lead to a successful claim.

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I’m conscious that if a chargeback had been raised for defective services, I think it’s relevant Mr D utilised the service and B offered to issue a part refund. There are some limitations to what B holds itself out as being liable for with regards to the contract for the provision of the accommodation, and I think it would have sought to defend the chargeback on the basis it acted in line with its own terms and conditions. So while the card scheme’s intention in the rules isn’t definitive for every situation that comes up, I think B would likely have defended on the basis the service was utilised, and that even if there were elements of the accommodation that were defective that it could’ve been liable for, it had offered a partial refund of around 30%. On balance I think that defence would’ve been considered valid because I think the card scheme would’ve considered the value for the services provided did not need to be refunded. I therefore don’t think Halifax were unfair not to pursue the chargeback. Overall, while I know Mr D will be unhappy, I don’t find there’s grounds to direct Halifax to pay a further refund. Mr D said Halifax offered £80 in relation to some misinformation provided initially. I think that seems broadly fair in the circumstances given it didn’t cause any significant detriment and I’m not going to direct it to do more. My final decision My final decision is that Bank of Scotland plc trading as Halifax has done enough to put things right. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr D to accept or reject my decision before 17 April 2026. Simon Wingfield Ombudsman

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