Starling Bank Limited · DRN-6260671

The complaint R complains about how Starling Bank Limited (‘SB’) handled a claim it made. What happened The parties are familiar with the background details of this complaint – so I will briefly summarise them here. It reflects my role resolving disputes with minimum formality. R purchased a training programme (‘the service’) from a merchant (‘the supplier’) using its business credit card across three transactions in April and May 2025 totalling £1,929.63. R approached SB with a dispute about the service around August 2025. Essentially, R says the supplier failed to honour a cancellation under the money back guarantee. R says the guarantee was that if it didn’t earn $10,000 within the 90 days it would be entitled to a refund. SB looked into things but didn’t raise a chargeback. R disagreed with this but in summary SB said it had declined to raise the chargeback because: • The transaction was ‘viewed as an investment in nature’; • R requested the refund after 90 days; and • there was not evidence the guarantee was without restrictions. R escalated a complaint about the claim to this service which our investigator did not uphold. The matter has now come to me for a final decision. I issued a provisional finding which said: What I’ve provisionally 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. While I might not comment on everything (only what I consider key) this is not meant as a discourtesy to either party – it reflects my role resolving disputes with minimum formality. I am sorry to hear about R’s issue with the service it paid for. However, it is worth noting here SB is not the supplier of the service. So when looking at what is fair I consider its role as a provider of financial services – and what it reasonably could have done to help with the information that was reasonably available to it at the time. As R used a credit card to pay for the service in dispute I consider the protections of chargeback and Section 75 of the Consumer Credit Act 1974 (‘Section 75’) to be particularly relevant here. Section 75

-- 1 of 4 --

I note that R has made references to general principles of law and legislation that may be relevant in respect of a claim for breach of contract or misrepresentation. For completeness, Section 75 can enable a debtor to make a ‘like claim’ against a creditor in respect of breach of contract or misrepresentation by a supplier. However, it doesn’t apply here because R, the customer of SB and debtor in respect of the card agreement is a Limited Company. Because of my findings in respect of chargeback I don’t consider it necessary to go into detail as to the legal reasons why this is – but in summary it is because of the specific definition of an ‘individual’ under the Consumer Credit Act 1974. Therefore, as Section 75 does not apply it follows that I won’t be considering SB’s liability in respect of the legal aspects relating to breach of contract or misrepresentation which R has raised here. It is also worth noting that as this was a business-to-business purchase consumer law which R has quoted would not apply in any event. Chargeback The chargeback scheme is a way which SB can assist R with recovering its money where there is a dispute regarding purchased goods or services. However, it isn’t guaranteed to succeed and will be governed by the strict rules of the card scheme (in this case Mastercard). From the information that R presented to SB to support the claim it was clearly about a training course/business development programme. And while it promised financial success or money back (under the guarantee) I disagree with SB that this would mean it would be excluded under the chargeback rules for being considered an investment product or some other reason. There is nothing I am aware of in the Mastercard rules that persuasively shows that a chargeback would have failed due to the nature of the service purchased here. From what I can see it is very clear from R’s submissions to SB that this claim was about the supplier failing to provide a refund under its guarantee. So I consider the most relevant chargeback rule here is ‘Refund/Credit Not Processed’. From what I can see R was unable to provide a copy of the full terms and conditions of sale relating to the purchased product. However, I think the information R provided otherwise (including the details in the claim form) is sufficient to have enabled the parties to understand the dispute. And I am satisfied that R provided supporting evidence to SB at the time of the claim (in the form of correspondence with the supplier and links to sales video) that persuasively shows: • The supplier had told R the service had a full ’90 day’ money back guarantee; and • the supplier failed to disclose its full refund policy at the time of the transaction (the supplier openly admits that it made the refund policy document available for R to download after the sale, containing the additional and previously undisclosed requirements for eligibility which it relied on to decline its refund request). I note here the Mastercard rules are clear that a valid chargeback under this reason code is where: The merchant failed to disclose its refund policy at the time of the transaction and is unwilling to accept a return or cancellation of goods or services. So although SB point out that there are likely qualifications to any refund under the guarantee (and from what the supplier said in correspondence with R I think that is likely as well) I am not persuaded that this is detrimental to the chargeback here – because this policy was not disclosed at the time of the transaction.

-- 2 of 4 --

I note that SB has said that it didn’t raise a chargeback because R had requested a refund outside of 90 days. However, I don’t think this is a reason it should have not raised one. I say this because: • It isn’t clear that a refund request needs to be made within the 90-day period to be eligible for a refund (or whether the 90 days is the period where the customer needs to measure success first); • R offered to provide SB information (which it has since shown) which shows it did request a refund within the 90 days anyway; and • the supplier didn’t disclose its full refund policy prior to the transaction in any event. In summary, I think SB should have raised the chargeback for R. I think that it is possible the supplier would have defended it. But I don’t see how it could have credibly done so under the specific chargeback reason code when it had accepted that its full refund policy was disclosed after the transaction. Had the matter gone to Mastercard arbitration there is always a question of whether the chargeback would have succeeded or not. However, where things are unclear I decide them on balance, and in line with what is fair and reasonable in the particular circumstances. Here SB has deprived R of the opportunity of finding out if the chargeback would have gone on to succeed. With this in mind, and because this chargeback appears to be relatively strong when read alongside the specific rules and evidence here, I think it is fair and reasonable for SB to refund R the amount in dispute as if the chargeback would have succeeded. It should also pay out of pocket interest on the refund from the date SB gave R its original claim outcome to the date of settlement. My provisional decision I uphold this complaint and direct Starling Bank Limited to refund R £1,929.63 plus 8% simple yearly interest calculated from the date of its original claim decline to the date of settlement. If SB considers it should deduct tax from the interest element of my refund it should provide R with a certificate of tax deduction. R accepted the decision. SB did not respond. 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. Neither party has given me cause to change my provisional findings. So my final decision is the same for the reasons already stated above. Putting things right See below. My final decision I uphold this complaint and direct Starling Bank Limited to refund R £1,929.63 plus 8% simple yearly interest calculated from the date of its original claim decline to the date of settlement.

-- 3 of 4 --

If SB considers it should deduct tax from the interest element of my refund it should provide R with a certificate of tax deduction. Under the rules of the Financial Ombudsman Service, I’m required to ask R to accept or reject my decision before 27 April 2026. Mark Lancod Ombudsman

-- 4 of 4 --