DRN-6040019

The complaint Mr A has complained about the way HSBC UK Bank Plc (“HSBC”) dealt with a claim for money back in relation to a package holiday he paid for with credit it provided. What happened All parties are familiar with the facts of this case so I’ll only briefly set them out here. In April 2023, Mr A used his HSBC credit card to pay for a package holiday he’d booked through a booking agent I’ll refer to as L. The holiday was supposed to take place between the 21 and 28 July 2023. My understanding is that the package included flights, hotel and transfers and the total cost was just under £2,600. Mr A used his HSBC credit card to pay the deposit of £576 and the remaining amounts were charged by L directly from the card in May and July 2023. Mr A says he needed a VISA to travel abroad to the country where he’d booked the holiday but was unable to get an appointment to get the VISA before the holiday so on 28 April 2023, he cancelled the holiday. While L processed the cancellation, it said that the full amount for the holiday was still due and took the remaining amount due from Mr A’s credit card. Mr A appears to have initially raised the dispute with HSBC in 2023 which was declined in May 2023 as he hadn’t provided sufficient information to progress the dispute. HSBC says it received further contact regarding the dispute in 2025, and at this time considered a section 75 claim under the Consumer Credit Act 1974 (section 75). It declined the claim saying L had acted in line with its terms by charging him the full amount so it didn’t think his claim was valid. It issued a final response to his complaint on that basis. Unhappy, Mr A decided to refer his complaint to the Financial Ombudsman. Mr A felt he’d been treated unfairly as he’d been forced to pay for a holiday he didn’t use and he’d been left with no protection. Our investigator looked into things and felt HSBC’s response to Mr A’s section 75 claim was correct and its unlikely a chargeback claim would have succeeded. Mr A didn’t agree – he felt that he’d lost an entire holiday with no recompense and didn’t feel either HSBC or L had treated him fairly. As the matter couldn’t be resolved, the complaint has been passed to me to make a final decision. 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. Firstly, I’d like to reassure Mr A, that I have considered all his concerns carefully, but I will only be dealing with the most salient parts of the complaint in this decision as I’m required to decide matters quickly and with minimum formality. Our rules allow us to do this. I understand how disappointed Mr A must feel given he’s paid significant sums for a holiday that he didn’t enjoy but has had to pay for it. But it may be helpful to explain that I need to

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consider whether HSBC – as a provider of financial services – should offer a remedy in response to his claim under section 75. But it’s important to note HSBC isn’t the supplier. Section 75 is a statutory protection that enables Mr A to make a ‘like claim’ against HSBC for breach of contract or misrepresentation by a supplier when goods or services were bought using a credit card. But it’s important to note that HSBC isn’t L and isn’t responsible for everything that might’ve gone wrong. HSBC is only liable to offer a remedy if Mr A can establish with evidence that there has been a breach of contract or misrepresentation – not for poor customer service or feeling he hasn’t been treated fairly by L. There are certain conditions that need to be met for section 75 to apply. From what I’ve seen, I think those conditions have been met and HSBC doesn’t appear to dispute this. It may be helpful to explain that there are consumer rights laws and regulations that underpin contracts like this which I’ve taken into account such as the Package Travel and Linked Travel Arrangements Regulations 2018 (PTR) as well as The Consumer Rights Act 2015 (CRA). In order to uphold Mr A’s section 75 claim on the basis that there has been a breach of contract, Mr A would need to evidence that L breached a term of the contract (either express or implied)– and that caused him to suffer loss. The Consumer Rights Act 2015 (CRA) for example, implies terms into the contract that services must be performed exercising reasonable care and skill. The PTR sets out the applicable remedies where L has failed to conform to the contract. However, to begin with Mr A must evidence that there has been a breach of contract or a misrepresentation on the part of L, that HSBC is now obligated to remedy. And like our investigator mentioned, it doesn’t look like L has breached the contract by charging him the costs it has charged him. As explained by our investigator, the contractual terms that Mr A agreed to when he booked the holiday sets out the limited circumstances where he may be entitled to a refund if he chooses to cancel such as if L (or one of its suppliers) fundamentally changes the offer Mr A agreed to or if the final costs applicable are considerably more than what was offered to him. In this instance, Mr A cancelled due to his inability to obtain a VISA in time for the holiday which doesn’t entitle him to a refund. When Mr A made the booking, he also agreed for L to take the payments due to it under the contract. So, it doesn’t look like there has been a breach of contract on the part of L that HSBC would now be liable to remedy. Overall, section 75 is a legal claim, and the onus is on Mr A to evidence that claim. I don’t think it was unfair for HSBC to conclude that there doesn’t seem to be a valid claim here that requires it to offer a remedy. As explained by our investigator, businesses like HSBC can also consider making a claim under the chargeback rules. It looks like HSBC did consider such a claim in 2023 but it closed the dispute as it didn’t have sufficient information to progress the dispute. But given the information provided, I think like our investigator, its unlikely Mr A’s claim had a reasonable prospect of success and I’ll explain why. Chargeback allows HSBC to request a refund directly from the merchant on Mr A’s behalf if his claim meets certain requirements/conditions. Not all disputes will be covered by the chargeback rules. Common reasons include cases where there’s evidence that the merchant failed to provide the goods/service, the goods or service were defective, or consumers were entitled to a refund under the merchants terms. But in this case, Mr A

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cancelled due to being unable to obtain a VISA – and this didn’t entitle him to a refund so it’s unlikely his claim would have succeeded. HSBC is unable to dispute the fairness of the chargeback rules and must simply apply them as they are. So, as I don’t think there was any reasonable prospect of success under the chargeback rules, I don’t think Mr A has lost out as a result of anything HSBC did/did not do in relation to a claim under the chargeback rules. Overall, I sympathise with Mr A’s situation and understand why he’s so disappointed having to pay for the holiday when he didn’t get to go on it. But based on what I’ve seen, I don’t think HSBC has acted unfairly, so there aren’t any grounds for me to uphold this complaint and direct HSBC to offer a remedy. I should point out that Mr A doesn’t have to accept this decision and if he rejects it, it will not be binding on him or HSBC. He may then be able to pursue the matter by more formal means such as through the courts. My final decision For the reasons given above, I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A to accept or reject my decision before 14 May 2026. Asma Begum Ombudsman

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