Disputed transactions

Typical complaints about cash machine transactions include:

• the customer says they didn’t make a cash machine withdrawal that has appeared on their account
• the customer’s account has been debited with a cash machine withdrawal, but the customer says the full amount wasn’t dispensed

We ask for information from you and the customer to assess whether or not the customer made the transaction.

When the cash machine withdrawal is disputed, we usually ask the customer:

• where they were when the transaction took place
• the location of the cash machine used to make the withdrawal
• their previous use of the same cash machine

Examples of things we might ask you:

• how the card used to make the withdrawal was recognised by the cash machine, for example, by reading a microchip or magnetic stripe
• how the transaction was verified by the system, for example, by inputting a personal identification number
• if there’s more than one disputed transaction or a pattern of transactions at the same cashpoint
• the electronic audit trail for the withdrawal and any related transactions (for example, balance enquiries) that preceded or followed it

If we decide that the customer didn’t make the transaction, we’ll assess whether they have any liability for it – and, if so, how much. We take account of:

• the account terms and conditions
• the law, such as the Payment Services Regulations
• industry codes of practice
• sections 83 and 84 of the Customer Credit Act 1974, when the withdrawal was made using a credit facility

Where there’s a series of disputed transactions, we’ll assess whether and how that affects any liability the customer might have.

When a customer says they made a cash machine withdrawal, but didn’t receive the full amount of cash, we ask the customer:

• what they remember of the cash machine transaction, including any information or messages they remember seeing on the screen of the cash machine
• whether they interacted with anyone at the time of the transaction, such as a conversation with someone else at the cash machine

We’ll ask you:

• for the cash machine records, to see when the cash machine was next balanced following the disputed transaction and whether there was surplus or missing cash
• whether the machine took back cash dispensed but not removed from the slot, and other transactions before and after the disputed transaction
• whether other complaints have been received about malfunctions at the same cash machine around the same time
• information about your cash machine procedures

Once we have the necessary information, we’ll consider whether or not the cash machine dispensed the correct cash for the disputed transaction. If we decide that it did, we’ll then consider other factors that might affect the customer’s liability for the transaction.

Disputed transactions made with plastic cards happen in locations such as shops, bars and restaurants, and also with goods or services bought over the internet. Usually, the customer notices the transaction on their account and complains that they didn’t make or authorise it.

The transaction may have been made with a debit or credit card and by presenting the card in person or remotely. Remote transactions by phone or over the internet are also called ‘cardholder not present’ transactions.

Card details not used in the way the customer expected

Sometimes customers tell us that while they agree they provided their card details to a supplier of goods or services (usually by phone or online), the supplier has used those details to make a transaction they did not authorise.

An example might be a customer who used their debit card to pay for an item over the phone – but later found that the supplier had included extra amounts in the transaction, for charges that the customer wasn’t told about and hadn’t agreed to.

When we deal with complaints like this, we get as much information as we can about the circumstances in which the payment was made. We then weigh up all the facts and decide what the customer most likely agreed the supplier could take from their card account.

Complaints about unauthorised payments

For complaints about where the customer didn't make or authorise the disputed transactions – see our guidance on fraud and scams.

Complaints about the quality of goods or services

When the complaint is about the quality of goods or services paid for with a credit card, section 75 of the Customer Credit Act 1974 may apply. Find out how we deal with section 75 complaints.

“Chargeback” is the name given to the process that enables consumers – in certain circumstances – to challenge and claw back payments made using their plastic card. 

Typically consumers who complain to us about chargebacks have asked their card issuer to try to obtain a chargeback of a transaction because:

• they did not make or agree the plastic card transaction; or
• the transaction was carried out by the merchant for the wrong amount, or was duplicated

We also hear from consumers who tell us the goods or services paid for were not provided. Find out more about our approach to complaints about goods and services bought with credit. 

Complaints brought by merchants

Chargeback complaints brought by merchants against their merchant acquirers are usually about chargeback requests that were made and accepted. The merchant may complain:

• that the chargeback was made for unfair reasons
• that the merchant acquirer didn’t properly defend the request

The right of the merchant acquirer to debit the merchant’s account comes from the contract between them. Often referred to as the ‘merchant services agreement’, the agreement is made when the card-processing facilities are provided to the merchant by the merchant acquirer.

We’ll consider the terms of the merchant services agreement when we assess whether or not the merchant acquirer was allowed to debit the merchant’s account.

“Cardholder not present” transactions

Complaints from merchants often involve chargebacks made on card payments accepted over the phone or internet, also called ‘cardholder not present’ transactions. Merchant services agreements often have strict rules about when and how merchants may accept these transactions, and when they can be clawed back.

If the merchant acquirer has acted according to the terms of the merchant services agreement, we’re unlikely to uphold the complaint. This is even the case when the merchant has been the innocent victim of a fraudster who has obtained goods using a stolen card.

In some cases, the merchant says they were misled by the merchant acquirer about the risk of accepting a payment. Here, we consider the evidence and decide whether they were misled – and if so, whether that affects the merchant acquirer’s rights under the merchant services agreement.

Some of the disputed transactions that customers complain about are made over the counter of their bank or building society.

The customer thinks that someone else must have impersonated them at the bank or building society branch and made the transaction (usually a cash withdrawal).

Sometimes the customer suspects that a member of staff from the bank or building society was dishonestly involved in the matter.

The type of information that we need to see in complaints like this includes:

• any paperwork relating to the disputed transaction, such as withdrawal slips
• any recollection the bank or building society has of the transaction, such as a statement from the counter clerk who dealt with the transaction
• information about any previous disputed transactions involving the branch or employee in question
• any CCTV coverage available for the time the disputed transaction took place (although even where CCTV is available it is rarely conclusive)
• information from the customer about where they were when the transaction was made
• information about the previous pattern of transactions on the account
• information about the consumer’s circumstances and whether anyone else could have had access to the consumer’s card and details

We use this information to decide whether or not the customer made the transaction, or has or authorised someone else to make it.

We see complaints about disputed deposits made through paying-in machines (including night safes). Customers complain that they made a deposit through the machine that has not appeared on their account, or that they’ve been credited with less than they paid in.

Sometimes the customer suspects that a member of staff from the bank or building society was dishonestly involved in the matter.

The type of information that we need to see includes:

• any paperwork relating to the disputed transaction, such as deposit slips
• the records for the paying-in machine for the period during which the customer says the deposit was made
• information about the bank or building society’s procedure for processing payments from paying-in machines
• any CCTV coverage available for the time the disputed transaction took place (although in the complaints we see, this type of evidence – even where available – is rarely conclusive)
• information from the customer about exactly what was deposited and their recollections of making the transaction
• information about the previous pattern of transactions on the account
• information about the consumer’s circumstances and whether anyone else could have had access to the consumer’s card and details

If a member of staff is accused of dishonesty, we’ll need additional information from the bank or building society. This includes any previous similar disputed transactions involving the branch and employee in question.

We may need to keep some of this information confidential where it concerns third parties or the employment files of individual employees.

We’ll use this information to decide whether or not the customer made the deposit, and, if so, how much money was deposited.

Consumers often make a transaction to themselves, a friend or a relative. Or to pay someone, for example a builder. These transactions might be based in the UK, or abroad. And they can go wrong, such as when there is a mistake with the transaction details.

A consumer might tell us:

• the financial business made a mistake, and they’ve lost out as a result
• they made a mistake and the financial business hasn’t done enough to get help them get their money back
• the transaction details seem to have been correct, but the money hasn’t reached the intended payee and the financial business isn’t helping.

The type of information that we need to see includes:

• details of the payment instruction
• details of where the payment went
• details of attempts to reverse/clawback the payment (if applicable)
• copies of interbank/SWIFT correspondence (if applicable)
• copy of the relevant terms and conditions
• full contact notes
• relevant account statements 

We’ll use this information to decide whether or not the financial business is responsible for the transactions going wrong, and to decide whether it’s done enough to help the consumer get their money back.