Chargeback Culture
CHARGEBACK CULTURE
What actually happens when the money goes back, and who decided
Written 15 September 2026 – Northampton
There is a particular sound a phone makes when a payment reverses, and once you have heard it a few times you stop needing to look.
It never arrives on a working day. It arrives on a Saturday, or at eleven at night, or in the middle of a job when your hands are wet and the machine is running and you cannot get to it. A line on a statement. A reference number. A sum of money that was in the account this morning and is not in it now.
Ask the person it happened to what has just occurred and they will tell you, without hesitation, that they lost.
They will say the customer complained and won. That somebody looked at it and decided against them. That they were found to be in the wrong, by someone, somewhere, and that this is now on their record.
None of that happened.
Nobody looked at the work. Nobody weighed the evidence. Nobody formed a view about who was right, because the process that took the money is not designed to form one and does not claim to.
We have spent a long time working out what actually does happen, using only primary sources. Statute. Three ombudsman decisions read front to back. A High Court judgment. The regulator's own market review. And published research from a non commercial fraud prevention body.
And we should say at the start that we have lost this argument in real life. A dispute over twenty two pounds and fifty pence cost us our business bank account, which is set out in the second article in this series. So this is not a neutral account. It is a careful one, and where the evidence went against what we believed, we have said so.
ONE. IT IS NOT A VERDICT
Start with what the thing actually is, because almost everybody has it wrong. Including, in our experience, some of the people operating it.
A chargeback reverses a payment made on a debit or credit card. It exists under the rules of the card networks. Visa, Mastercard, American Express. Those rules were written by those companies. Parliament did not pass them. No court supervises them. They are a private commercial agreement between a network and its members, and they can be changed by the network without asking anybody.
That is a strong claim, so here is the Financial Ombudsman Service making it instead.
In a final decision under reference D R N four nine three seven zero one two, a couple who had paid two thousand two hundred and ninety pounds for a boiler on a Santander debit card, Ombudsman Farhana Akhtar wrote this.
There's no automatic right to a chargeback. The chargeback process doesn't give consumers legal rights. And chargeback is not a guaranteed method of getting a refund because chargebacks may be defended by merchants. It's important to note that chargebacks are decided based on the card scheme's rules, in this case Mastercard, and not the relative merits of the cardholder merchant dispute.
Read that final clause again, slowly.
Not the relative merits of the cardholder merchant dispute.
An Ombudsman, in a binding final decision, stating in plain terms that the process does not decide who was right. Not that it decides badly, or hastily, or with insufficient evidence. That deciding who was right is not what it is for.
The Ombudsman Service says the same on its public guidance page for consumers. A bank or lender doesn't have to raise a chargeback. And then. Ultimately, chargebacks can fail and it's not always reasonable to raise one at all.
The bank may raise one. Where valid grounds exist, the Service says it can be good practice to do so.
Good practice. Not obligation. Not a right. Not even the consumer's.
So a tradesman who loses a chargeback has not lost a case. There was never a case. There was an administrative determination, made between two parties, neither of whom was him.
And what gets written down is a category
There is a detail here that does more damage than anything else in this article, and it took us two years to understand it.
A reversal is recorded as a reason code. A short standardised description, chosen from a fixed list. Some codes say the goods or services were not received. Some say they were not as described.
And some say fraud.
Those are different allegations with very different consequences, and the difference is invisible at both ends. The customer picks from a menu. The merchant is told the outcome.
We set out in the second article what that does to a trade selling a weather dependent service. Where there is no code at all for, the supplier attended, the conditions made it unsafe, alternative dates were offered, and the customer would not take one. The list was written for retail, where a parcel either arrives or it does not. Nobody drafting it was thinking about a man who cannot get on a roof in a gale.
A process that does not test the merits still has to write something down. What it writes down is a category, chosen from a list, by one party, about the other.
TWO. WHO WROTE THE RULES, AND WHAT HAPPENED WHEN SOMEBODY TRIED TO CONSTRAIN THEM
If the rules are private, the obvious question is whose. The regulator has answered it.
On 13 December 2024 the Payment Systems Regulator published the final report of its market review into cross border interchange fees, reference MR 22.7. It recorded a fact that deserves to be better known than it is.
Mastercard and Visa account for ninety nine per cent of debit and credit card payments in the United Kingdom.
Two companies. Ninety nine per cent.
The regulator went further. It found that the two schemes were not subject to effective competitive constraints, which had allowed them to raise fees to an unduly high level.
The rise in question followed the United Kingdom's withdrawal from the European Union, when the European caps stopped applying. For card not present transactions between the United Kingdom and the European Economic Area on consumer cards, the debit rate went from nought point two per cent to one point one five per cent, and the credit rate from nought point three per cent to one point five per cent. Roughly a five fold increase. Applied because a cap fell away, rather than because any underlying cost had changed.
The regulator concluded a price cap was the only effective remedy.
And then the schemes went to court
Mastercard, Visa and Revolut brought judicial review proceedings challenging the regulator's power to impose the cap. Their argument was technical and, if it had succeeded, enormously consequential. That the regulator's power under section fifty four of the Financial Services, Banking Reform, Act 2013 to give general directions reached only the technical or operational plumbing of payment systems, and that setting prices was an unauthorised economic intrusion beyond its remit.
On 15 January 2026, in the case of the King on the application of Mastercard Europe and others against the Payment Systems Regulator, twenty twenty six, England and Wales High Court sixty four, Administrative Court, Mr Justice Cavanagh dismissed the claim.
He rejected the distinction between operational and economic regulation as a false dichotomy, holding that pricing is inherently operational.
The regulator won, and we want to record that clearly, because our own earlier draft of this article did not know the outcome and left a reader with the impression the challenge was still live or had succeeded. It was dismissed, and the regulator's authority to cap these fees is now judicially confirmed.
What the sequence actually shows is narrower than a conspiracy and more interesting than one. A regulator found that two companies controlling ninety nine per cent of a market had raised prices to an unduly high level, proposed a cap, and was taken to the High Court by those companies for trying. It took thirteen months to resolve. Nothing about that is unlawful and we are not suggesting it was. It is simply what it costs, in time, to constrain a private rule maker at that scale.
Separately, and we mean separately, because the intention was announced in March 2025 before any of the above concluded, the Payment Systems Regulator's functions are legislated to transfer to the Financial Conduct Authority under the Financial Services and Markets Bill 2026 to 2027, introduced on 19 May 2026. The Treasury has said the objectives and powers carry across. The findings above stand regardless. A market review is not undone by reorganising the body that produced it.
THREE. THREE FORUMS, AND THE TRADER IS A PARTY TO ONE
Read what the Financial Ombudsman Service says it examines when a chargeback complaint reaches it.
We'll look at how the bank or lender handled your issue about the goods or services, investigating whether it should have done more.
And look at the shape of the complaints it describes hearing. That the bank unfairly rejected a Section seventy five claim. That it did not pursue a chargeback when it would have been good practice to. That it did not investigate properly. That it took too long.
Every single one is a complaint about the lender's conduct. Not one is about the trader's work.
Which gives the architecture in full.
In the chargeback, the parties are the cardholder, the issuer and the acquirer. The trader is not one of them.
In the ombudsman complaint about that chargeback, the parties are the consumer and the bank. The trader is not one of them.
In a county court claim on the contract, the parties are the consumer and the trader. That is the only one.
The money can move twice, through two processes, before the only forum capable of examining the actual work has been approached at all.
That is not an allegation. It is the published structure, read off the ombudsman's own description of its jurisdiction.
And there is a fourth layer nobody mentions
When a sole trader takes a card payment on a driveway, they are not dealing with Visa. They are dealing with a payment facilitator. SumUp, Zettle, Square, Stripe. Which sits between the trader and the network.
That facilitator has its own exposure. The card schemes police acquirers by ratio, and under Visa's monitoring programme the acquirer thresholds are low. Above standard at nought point five per cent, excessive above nought point seven per cent.
The merchant level thresholds are much higher. Visa's Acquirer Monitoring Program designates a merchant excessive at a one point five per cent ratio, tightened on 1 April 2026 with the warning tier removed. But only alongside a floor of one thousand five hundred disputes in a calendar month.
A one van business will never see one thousand five hundred disputes in a month. Visa's merchant tier does not reach us, and anybody telling a sole trader that two chargebacks will trigger a Visa programme has not read the rules.
But the acquirer's threshold is nought point seven per cent, and the acquirer's portfolio includes us.
So the pressure does not come from the card scheme. It comes from the facilitator, managing its own aggregate number to stay under its own limit. And for a facilitator with tens of thousands of micro merchants, the cheapest way to manage a ratio is to remove the merchants contributing to it.
Which is the same architecture again, one layer deeper. A decision made about a trader, by a party he has no relationship with, to manage a risk that was never his.
And at the end of that chain there is a list
If a facilitator terminates a merchant for chargebacks, the merchant can be recorded on MATCH. The Member Alert to Control High risk Merchants, formerly the Terminated Merchant File. It is operated by Mastercard and used across the industry.
A listing lasts five years. It is purged automatically at the end of that period. There is no credit for good behaviour in the meantime, and the principal route off it early is the acquirer contacting Mastercard to say the entry was made in error.
Being on it makes taking card payments very difficult under any business name.
We should be careful here, because the detail comes from chargeback mitigation firms rather than from Mastercard's own published rules, and those firms sell a product to the problem they are describing. Treat the five years as reported rather than established. What is not in doubt is that the list exists, that it is industry wide, and that a merchant does not put themselves on it.
FOUR. WHAT THE DECISIONS ACTUALLY SAY
The Financial Ombudsman Service publishes its final decisions. Free, public, searchable, signed by the adjudicator, at a predictable web address. They contain real disputes between real people, frequently about tradespeople.
Nobody in this trade cites them. They are the best evidence available on this subject and they sit in the open.
We fetched three and read them front to back. One of them describes almost exactly our trade.
The landscaping case. DRN 6215500.
In around April 2025 a customer engaged a landscape gardener to supply slabs and complete work in his garden. He paid around seven thousand three hundred and fourteen pounds. Around three thousand four hundred and fifty two on a Halifax credit card, and around three thousand eight hundred and sixty two by bank transfer.
Less than half the contract touched the card. Section seventy five applied to all of it, and the Ombudsman found the technical criteria met.
The gardener part completed the work, did not supply the slabs, and stopped replying. An independent report found the customer had overpaid by around three thousand six hundred and fifty two pounds. Halifax offered five thousand and twenty two pounds. The overpayment, the cost of the report, a skip to clear the soil and rubble, and a labourer for a day.
The customer wanted around two thousand four hundred and sixty one pounds more, evidenced with three quotes showing that finishing the job with somebody else would cost more than the original price.
Ombudsman Helen Boulton dash Agg refused it.
When damages are awarded, they should put the claimant in the position they would have been in if the contract had been performed. Damages should not be awarded to put the claimant in a better position.
And then the reasoning, which is the part that matters to anybody who quotes for a living.
Mr H agreed to a price for the works. This price was specific to the gardener. However, as Mr H has shown through the additional quotes he obtained, different suppliers set different prices. I think it is reasonable to say, it may well be, that cost, always would have been that cost, to complete the remaining work. So, I think to ask Halifax to pay more would put Mr H in a better position.
A failed contract does not fund an upgrade.
That is not an ombudsman's discretion or a modern policy preference. It is the common law, and it is old. In Robinson against Harman, 1848, Baron Parke put it in a sentence that has survived a hundred and seventy eight years.
The rule of the common law is, that where a party sustains loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.
Restored. Not upgraded. A customer let down by a trader is entitled to be put back where the contract would have left them. And the fact that the next contractor charges more is not a loss the first one caused. It is what that work costs.
This is a real and substantial protection for tradespeople and essentially nobody in the trade knows it exists.
There is a second finding in the same decision. The gardener defended the chargeback, and Halifax accepted the defence. The Ombudsman considered whether more time would have changed things and concluded it would not.
The report estimated the work completed by the gardener cost slightly more than the amount paid on the credit card. So, in any case, I don't think Halifax would have taken the chargeback further.
The chargeback would have failed because the value of work actually done exceeded the amount charged to the card.
That defence is available to any trade that can evidence what it did. Which is exactly what a photographed, measured, dated record establishes. And exactly what most of this trade does not keep.
The boiler case. D R N four nine three seven zero one two.
A couple bought a boiler in June 2022 for two thousand two hundred and ninety pounds on a Santander debit card, with a twelve year annual service plan. The first service was due in July 2023. The merchant had gone out of business.
Santander declined to raise a chargeback, because the paperwork described the annual servicing as free. Ombudsman Farhana Akhtar agreed.
A chargeback can only be raised for goods or services not provided when the customer has paid for the goods or services in question.
Complaint not upheld.
A service described as free on the paperwork carries no chargeback right, even where it was plainly part of the bargain. That protects the trader on that item, and it means a customer who valued it has no route to it. Both are true, and anybody writing a quotation with a free first clean or a free gutter check on it should know which side of that line they have just drawn.
The one that reverses the assumption. D R N four three six five seven three three.
In June 2019 a man paid a training provider two thousand two hundred and ninety three pounds. He failed a test, a retest was cancelled over an equipment fault, and the provider refunded only the retest.
He complained to H S B C, which raised a chargeback. In February 2020 the money was credited to his account while the dispute ran. In March 2020, following pre arbitration, the chargeback succeeded and the credit was made permanent.
The customer had won. Completely.
Then, in the Ombudsman's words.
S took legal action against Mr L to overturn the successful chargeback.
In August 2022 the court upheld the merchant's claim. The customer was ordered to repay the funds plus court costs.
A merchant lost a chargeback outright and sued in the civil courts, and the money came back.
The Service confirmed it has no jurisdiction over any of that. Its investigator said the service couldn't consider the action the merchant had taken through the courts. Ombudsman Sonia Ahmed recorded that, a court judgment having been issued in the merchant's favour, the decision won't comment on the outcome of chargeback.
The customer's own argument is worth recording. He told the bank he had not made the chargeback, the bank had, and so he had not clawed back the money. It did not save him. The money had been reversed into his account and a court ordered him to give it back. The fact that the bank operated the mechanism did not move the liability away from the person who kept the proceeds.
A successful chargeback settles the payment. It does not settle the contract.
One caution, and it is serious. From the chargeback being made permanent in March 2020 to judgment in August 2022 is two and a half years, to recover two thousand two hundred and ninety three pounds. We are not presenting the county court as a tidy remedy. We are recording that the obligation survived, and what surviving cost.
FIVE. WHAT THE WORK IS ACTUALLY JUDGED AGAINST
Underneath all of this is a question almost nobody asks. When a service is disputed, what is the legal test?
It is not whether the customer was satisfied. It is not a star rating. Consumer Rights Act 2015, section forty nine.
Every contract to supply a service is to be treated as including a term that the trader must perform the service with reasonable care and skill.
And in the Explanatory Notes published alongside the Act, this, which we think is the most important sentence in the entire series.
Reasonable care and skill focuses on the way a service has been carried out, rather than the end result of the service. This means that, if a trader has not provided a service with reasonable care and skill, they will be in breach of this right, whatever the end result.
The statutory test for a service is method, not outcome.
Read it the other way round, because that is the direction that matters out here. A trader who performed the service with reasonable care and skill has complied with section forty nine, whatever the end result.
A render that does not come back to new. A stain that does not fully lift. Lichen on a north elevation that returns faster than anybody hoped because the wall faces the weather and always will. The statutory question is not whether the customer got the result they pictured. It is whether the work was carried out with reasonable care and skill.
And the way a service has been carried out is exactly, and only, what a contemporaneous photographic and written record documents.
That is why we keep the case log. Not to advertise. Because it is the evidence of the standard the law actually applies.
Two more things from the same Notes. The Act deliberately contains no definition of reasonable care and skill, so the standard can flex between industries. And what fills that gap, the Notes say, is industry standards or codes of practice. They add that the price paid can also be a factor in what level of care is reasonable.
We should be careful and narrow here. A method documented by one business is not an industry standard and we are not going to pretend otherwise. The claim that survives is smaller and still worth making. The statutory test is filled by reference to standards and codes. This trade has very few. And documenting method rigorously is therefore worth more here than in a trade where they already exist.
SIX. AND THE REMEDY IS NOT A REFUND
Here is the part that almost nothing written about chargebacks mentions.
When a service does not conform to the contract, the Consumer Rights Act gives the consumer two remedies. Section fifty five, the right to require repeat performance. Section fifty six, the right to a price reduction.
Repeat performance means the trader does it again, to the extent needed to complete it in conformity with the contract. Within a reasonable time, without significant inconvenience, and bearing all necessary costs including labour and materials. That obligation is the trader's, it is unconditional, and nothing in this article suggests otherwise.
But look at when the money comes back. Section fifty six, subsection three.
A consumer who has the right to a price reduction and the right to require repeat performance is only entitled to a price reduction in one of two situations. Where putting it right is impossible, or where the consumer has required repeat performance and the trader has failed to do it within a reasonable time and without significant inconvenience.
Money back is not the opening position. It is the fallback, and it unlocks in exactly two circumstances. The work cannot be put right, or the trader was asked and failed.
Now hold that against the button.
A customer who reverses a payment without ever asking for the work to be put right has taken money in circumstances where the statutory scheme would not yet have given it to them.
We want to state that precisely, because it is easy to overstate and we are not going to. A chargeback is not a statutory remedy at all. So the accurate sentence is not that the customer used the wrong remedy. It is that they bypassed the statutory scheme entirely, and that scheme would not have returned their money at that point.
The Act also preserves other routes. Damages. Recovering money where consideration has failed. Specific performance. Treating the contract as at an end. And relying on the breach against a claim by the trader. None of those is a chargeback either, and every one of them is a forum where the trader is a party.
SEVEN. WHY PEOPLE DO IT
The easy story is that consumers have become entitled.
We do not believe the easy story and the evidence does not support it.
StepChange, the country's largest debt charity, finds that half of United Kingdom adults have experienced problem debt. And that almost half of them keep it secret.
Sit with the second half of that, because it explains something every tradesperson has experienced and almost nobody has understood.
Secrecy is the mechanism.
A customer in difficulty does not ring and say they cannot pay this month and could we sort something out. Roughly half of people in problem debt tell nobody at all. What they do instead is what secrecy permits. They go quiet. They stop answering. Or they press a button that reverses the payment without a conversation.
The dispute button is not attractive because it is dishonest. It is attractive because it requires no admission. It lets somebody reclaim sixty pounds without telling a single person that they needed to.
And a substantial number of them do not know it is a crime
Cifas is the largest not for profit fraud prevention service in the United Kingdom, with more than seven hundred and fifty members across banking, retail, insurance and telecoms. Its data is included in the Office for National Statistics crime figures for England and Wales.
Its Fraud Behaviours survey, conducted by Opinion Matters among a nationally representative sample of two thousand United Kingdom adults between 22 and 28 May 2024, found that forty eight per cent of adults believed it was reasonable to commit first party fraud.
Nearly half.
And then the 2025 wave was published, and it had gone up.
Cifas headlined it. Fraud acceptance hits tipping point as half, fifty per cent, of United Kingdom adults say first party fraud is reasonable.
In 2024 the figure was forty eight per cent. In 2025 it was fifty.
Two points in a year, and across the line. We have looked at a great many numbers writing these six articles and that is the one that stopped us, because it is not a measure of behaviour. It is a measure of permission. Of how many people have concluded that this is a thing a reasonable person may do.
The same wave found one in thirteen adults, eight per cent, say they have committed first party fraud. And among twenty five to thirty four year olds, a third say they have been involved in it, which makes them by some distance the most likely age group.
And the most common form of it, in both waves. Retail non delivery. Falsely claiming an item never arrived. Nineteen per cent in 2024. Eighteen per cent in 2025, saying they or somebody they know has done it.
The two waves asked it slightly differently, the 2025 figure including people reporting somebody they know, so we are giving both rather than drawing a line between them.
That is the chargeback, described in retail terms, sitting at number one on a national list published by the country's fraud prevention service, two years running.
We should be careful. Cifas measured a clothing scenario, not a service dispute. The parallel is in the mechanism, not the measurement. But the mechanism is identical. I did not get what I paid for, said by somebody who did.
Then the finding that reframes the whole argument. Thirty six per cent did not regard asset conversion fraud as illegal. That is selling a car on a hire purchase agreement and continuing the payments. Twenty two per cent thought money muling was legal. Nineteen per cent thought the same of mobile phone insurance fraud.
Over a third of United Kingdom adults did not know that a specific, common, prosecutable fraud is a crime.
Not rationalising. Not excusing. A measured gap in public understanding, published by a non commercial body, and large.
An earlier wave of the same survey, two thousand adults, 7 to 19 September 2023, found twelve per cent admitting to one or more first party frauds in the previous twelve months, up from ten per cent in 2022 and eight in 2021. It named three drivers. Cost of living pressures. Uncertainty at what constitutes fraud. And exposure to advertising offering unrealistic deals. Different scenario sets and different fieldwork, so we report each with its own year and draw no line between them.
Put it together.
The dispute button is pressed by people under financial pressure, who cannot bring themselves to say so, a substantial share of whom do not understand that what they are doing has a name and that the name is a criminal offence.
That is not a defence of it. It is the mechanism. And it is far more useful than the easy story, because you cannot fix entitlement and you can fix a gap in understanding.
Mike Haley, Chief Executive of Cifas.
First party fraud is too often seen as a victimless crime. But the truth is very different. It is a growing threat and causes significant harm to individuals, businesses, and communities, and can result in severe repercussions for perpetrators.
EIGHT. THE THING WE COULD NOT EXPLAIN UNTIL WE FOUND THE RESEARCH
There is something we had noticed for years and had no way of describing without sounding bitter.
The same person will take two completely opposite positions on the same principle, within a day, and mean both of them.
At four in the afternoon they are at work, enforcing a policy against a customer, explaining with genuine conviction that rules are rules and nothing can be done. At seven in the evening they are on the phone to an energy supplier about a three hundred pound adjustment they did not expect and could not have prevented, describing it, also with genuine conviction, as an injustice.
We assumed for a long time that this was hypocrisy. It is not, and there is a literature on it.
Research published in Personnel Review on competing identities found that.
In established market economies, individuals tend to have very distinct identities as employees or consumers, and make different evaluations of corporate reputations depending on the chosen identity.
The same person evaluates the same corporate conduct differently depending on which identity is active. Not deceitfully. Structurally. The employee self and the consumer self are separate, and they do not have to agree.
Which means the customer who reverses a payment on a Sunday may well be, on Monday morning, the person telling somebody else that a refund is against policy. Neither of them is lying. They are two different people in the same body, and the research says that is ordinary rather than exceptional.
This matters enormously to how a trade should think about disputes, because it disposes of the two comfortable explanations at once. The customer is not a bad person. And they are not going to be persuaded by being shown their inconsistency, because to them there is no inconsistency. The two situations were experienced by two different selves.
And the behaviour has a name too
The service management literature has a formal term for a complaint made without an underlying service failure. It calls it an illegitimate complaint, and the broader category is dysfunctional customer behaviour.
One study puts it plainly. Customers may make illegitimate complaint without an actual experience of service failure, and illegitimate complaints from customers are so common that they bring enormous challenges to frontline employees and service organizations.
So common. A whole trade has been experiencing a named, studied phenomenon and calling it bad luck.
And so does the cost of dealing with it
The same body of research is about emotional labour. The work of managing your own emotional presentation as a requirement of the job.
That is the academic name for the part of this nobody bills for.
It is the message you rewrite three times on a Sunday evening because you do not want to sound like you are accusing anybody. It is the reply to every review, written calmly, when you do not feel calm. It is apologising for the fourth time and re explaining the same facts to the same person, knowing they will not land any better than they did the first three times.
It is not billable, it takes hours, it is exhausting in a way that physical work is not, and there is an entire literature on it that nobody in the trades has ever been shown.
We are recording it because it belongs in the accounting. The disputed sixty pounds is the smallest part of what a dispute costs.
NINE. WHERE WE WERE WRONG
We had written, in our own research for this article, that a small trader holds rights he cannot exercise because the cost of exercising them exceeds the sum in dispute.
Then we looked up the fees, and that was too strong.
A money claim in England and Wales costs thirty five pounds up to three hundred. Fifty pounds to five hundred. Seventy pounds to one thousand. Eighty pounds to fifteen hundred. One hundred and fifteen pounds to three thousand. Two hundred and five pounds to five thousand. And four hundred and fifty five pounds to ten thousand. Fees may be recovered if the claim succeeds, and help with fees is available on a low income or certain benefits.
On a twelve hundred pound render clean that is seven per cent, refundable on winning. It is not true that the cost exceeds the sum, and we were wrong to say so.
So the barrier is not price. It is time, because every hour preparing a claim is an hour not earning. It is enforcement, because winning a judgment and collecting the money are two different things with separate applications and separate fees, and a judgment against somebody with nothing is paper. And it is the social cost of suing a customer who lives on a road where you work for four other households.
That correction makes the charge harder rather than softer, because it cannot be answered by lowering a fee.
And one fact survives it intact.
A trader can be sixty pounds lighter through two processes he was never a party to, and the only forum that would hear him is one he must pay thirty five pounds to open.
There is a detail we cannot leave out. Every paper money claim in England and Wales is returned to the Civil National Business Centre, Saint Katharine's House, Saint Katharine's Street, Northampton. Every unpaid invoice in the country, pursued on paper, arrives in this town.
TEN. WHAT WE REFUSED TO PRINT
Two published ombudsman decisions were described to us during this research. One was said to establish that damages cannot fund an upgrade. The other, that a business which loses a chargeback can still sue and win.
Both would have helped this article considerably.
We went looking on 14 September 2026 and could not find either. So we took them out. Including the one that supported our case. Untraceable material does not appear on this site, and that rule is worth nothing if it only applies to the inconvenient half.
The reference numbers arrived afterwards. We fetched both decisions, read them in full, and they are in section four with their references and the name of the Ombudsman who signed each one.
We are telling you that because the process matters more than the outcome. The rule was never, this is probably false. It was, we have not read it.
Some other things did not survive. A figure of twenty eight pounds, described as a merchant administration fee set by the Financial Ombudsman Service. That body does not set merchant fees, and a real number with an invented source is worse than no number. A claim that eighty four per cent of consumers find filing a chargeback simpler than a refund, which could not be traced to anybody. A claim that the United Kingdom outpaces the United States in serial chargeback offenders. All three came from companies selling chargeback mitigation services.
And we corrected four things in material supplied to us while writing this. That a Visa monitoring threshold had fallen to nought point nine per cent and would catch a trader doing a hundred jobs a month. It had not, and it would not, because the merchant tier requires one thousand five hundred disputes in a month as well as a ratio. That two named payment processors charge fifteen pounds a dispute and do not refund it. One of them charges nothing and the other refunds on a win. That a Mastercard programme was being eliminated in 2027. It is being folded into a new framework, not removed. And that the Financial Conduct Authority's Consumer Duty legally mandates banks to side with consumers in disputes. It does not, and saying so would have been checkable and wrong.
The Consumer Duty point is worth making correctly, because the accurate version is still strong. The Duty is real. Policy Statement P S twenty two stroke nine, in force from 31 July 2023. And it requires firms to act to deliver good outcomes for retail customers. The merchant is simply outside its scope. There is a regulatory duty running one way and nothing running the other. That is a structural fact and it does not need anybody's motive attached to it.
And one note on how any of this can be checked
Everything above was verified by opening the source. Not by reading a summary of it, and not by asking something confident whether it sounded right.
The three ombudsman decisions were downloaded and read end to end. Which is how we found that they were signed by three different Ombudsmen, and not, as we had been told, by one. The High Court judgment was located on the National Archives caselaw service. The statute was read on legislation.gov.uk including the Explanatory Notes, which is where the sentence about method rather than outcome actually lives. The Cifas figures came from Cifas.
We mention it because the distinction matters and it is easy to lose. A thing can be plausible, consistent with how these systems generally work, and very probably true. And still not be verified. Verified means somebody opened it.
That is the same standard we ask of a review, of a bank's decision about a business, and of every figure in these six articles. It ought to apply to us as well. And where we have not met it, the payment facilitator fees in section three, the five year MATCH listing, we have said so in the text rather than hoping nobody asks.
ELEVEN. WHAT WE THINK
We are two people who clean the outsides of buildings in Northamptonshire.
Nothing in this article is legal advice and we are not qualified to give any. If any of it touches your own situation, speak to somebody who is.
But here is what the evidence shows, and we have shown our working for every line of it.
The chargeback is not a verdict. An Ombudsman has said so in a final decision. It is decided on scheme rules, and not on the relative merits of the dispute.
It is not a right. The Ombudsman Service says a bank does not have to raise one.
The rules belong to two companies holding ninety nine per cent of United Kingdom card payments, which the regulator found were not under effective competitive constraint. And which took the regulator to the High Court when it tried to cap their fees, and lost.
The trader is not a party to the chargeback, nor to the ombudsman complaint about it, nor to the facilitator's decision about its own ratio, nor to the list he may end up on for five years.
The statutory standard for his work is method, not outcome. And the record of his method is the only evidence of it that will ever exist.
The statutory remedy is to put it right, not to hand the money back. The refund unlocks only where putting it right is impossible or was refused.
And the underlying obligation survives. A merchant who lost a chargeback in March 2020 sued, and in August 2022 the court ordered the money returned with costs.
None of that makes anybody a villain. Most of the people pressing the button are under real financial pressure, a substantial share do not know the conduct has a name, and the research says the same person will hold entirely opposite views about it depending on which self is in the room.
What it makes the system is badly designed.
It offers a fast, free, merit blind route to reversing a payment, and a slow, evidential, expensive route to examining whether the payment was owed. It puts those two routes in front of people at their least resourced and least able to tolerate uncertainty. It records the outcome as a category chosen from a menu. And it tells neither side what is actually happening.
That is the part we object to. Not the people.
Indict the architecture, not the individuals.
SOURCES
Case law. The King on the application of Mastercard Europe and others against the Payment Systems Regulator, twenty twenty six, England and Wales High Court sixty four, Administrative Court, 15 January 2026, Mr Justice Cavanagh. And Robinson against Harman, eighteen forty eight, Baron Parke.
Statute. Consumer Credit Act 1974, sections seventy five and seventy five A. Consumer Rights Act 2015, sections forty eight to fifty seven, and the section forty nine Explanatory Notes. Financial Services, Banking Reform, Act 2013, section fifty four. All at legislation dot gov dot uk.
Financial Ombudsman Service. Problems with goods and services bought using a debit card or credit. Decisions D R N six two one five five zero zero, D R N four nine three seven zero one two, and D R N four three six five seven three three. And the decisions database.
Regulators. Payment Systems Regulator, M R twenty two stroke two point seven final report, December 2024. Financial Conduct Authority, Policy Statement P S twenty two stroke nine, A new Consumer Duty, with guidance F G twenty two stroke five and rules at P R I N two A.
Cifas. The United Kingdom's largest not for profit fraud prevention service, and a membership body. Fraud acceptance hits tipping point as half of United Kingdom adults say first party fraud is reasonable, the Fraud Behaviours Survey 2025. Nearly half of United Kingdom adults feel first party fraud is acceptable, 21 January 2025. And one in eight United Kingdom adults admit to committing fraud in the last twelve months. All at cifas dot org dot uk.
Peer reviewed and academic. Employees or Consumers? The role of competing identities in individuals' evaluations of corporate reputation, in Personnel Review. And Dysfunctional customer behavior influences on employees' emotional labor, in Frontiers in Psychology, two thousand and twenty two.
Courts. Make a court claim for money, court fees, at gov dot uk.
Debt advice. If any of this is close to home, free regulated advice is available from StepChange, Citizens Advice and MoneyHelper, which is government backed. The Financial Ombudsman Service links to the first two from its own chargeback guidance page.
Sources and licensing. Contains public sector information licensed under the Open Government Licence version three point zero. Court judgments are reproduced under the Open Justice Licence. Quotations from copyright works are used under the quotation exception, section thirty, Copyright, Designs and Patents Act 1988, and each is attributed in the text. Figures are reported as published by the named body. Where credible sources disagree, all are given.
Matthew Kenneth McDaid, trading as Shining Windows
15 September 2026