DRN-6290512

The complaint Miss U is unhappy that Zilch Technology Limited (‘Zilch’) didn’t dispute a payment that she informed hadn’t been authorised by her. What happened Miss U had a membership with a business I’ll call ‘L’. The cost of this membership was £59.99 per month. Miss U says that in September 2025, she contacted L to cancel. It however offered £15 in store credit if Miss U continued her membership. Miss U accepted this. On 29 October 2025, L took another payment of £59.95 from Miss U’s Zilch account. The next day Miss U contacted L to say her current financial situation meant she could no longer remain a member. Miss U said she had tried to cancel the month before but been incentivised to stay. Given this she said L should cancel the membership and refund the most recent charge of £59.95 that been taken. After not receiving a satisfactory response from L, Miss U contacted Zilch to raise a dispute. It seems like Miss U was initially told by Zilch that she needed to wait 14 days before it could assist. Unhappy that she hadn’t been refunded immediately for what Miss U said was an unauthorised transaction, she logged a complaint with Zilch on 19 November 2025. On 4 December 2025, Miss U contacted Zilch to let it know L had agreed to refund the £59.95. Miss U said Zilch now needed to refund the associated ‘Zilch Anywhere Fee’ that had been charged. On 15 December 2025, Zilch issued its final response. In this it was acknowledged that Miss U had said the payment was unauthorised, but that after reading the correspondence said the dispute was more around the purchase with L. Given this Zilch said it was correct to advise that 14 days was required before it could assist with the dispute. Zilch acknowledged L had now refunded the £59.95 and that the instalment Miss U had paid had been returned. Unhappy with this Miss U referred the complaint to the Financial Ombudsman Service. One of our investigators considered the complaint and said under the Visa chargeback rules that apply to Miss U’s Zilch card, a dispute can’t be raised until 15 days after the consumer first tried to resolve the matter with the merchant. But in any event here, Miss U had received a refund from L. Additionally, the investigator advised that Zilch had said it had also refunded the ‘Zilch Anywhere Fee’ as a gesture of goodwill. The investigator added that given the evidence provided to it by Miss U, it wasn’t unreasonable for Zilch to not consider the transaction as unauthorised. As it didn’t seem that Miss U had cancelled her membership with L, prior to the payment being taken on 29 October 2025. Miss U didn’t agree and said her correspondence confirmed she had contacted L prior to the charge being taken. Miss U said given this the money being debited was therefore unexpected and correctly treated by her as unauthorised. As Miss U didn’t agree, the complaint has been passed to me to decide.

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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 would like to point out I’ve read and considered the whole file, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on any specific point, it’s not because I’ve failed to take it on board and think about it but because I don’t think I need to comment on it in order to reach what I think is the right outcome. I understand Miss U has other complaints with our service regarding Zilch. To clarify, in this decision I’m solely looking at the issues covered in the final response issued on 15 December 2025. That being that Zilch didn’t assist Miss U with a refund when she contacted it to say an unauthorised transaction had debited her account. As Miss U has said, the Payment Service Regulations 2017 are relevant to disputed transactions. In general terms a financial firm is liable if the customer didn’t authorise them and the consumer liable if they did. It isnt disputed here that Miss U was a customer of L’s and had agreed to the membership costing £59.95 a month. The issue here is that Miss U says she cancelled that membership before the payment that was debited on 29 October 2025. Therefore, that payment being taken was unauthorised. Zilch didn’t see things the same way. It considered things along the lines that Miss U was intending to dispute the purchase. But as L refunded Miss U, it didn’t need to take any further action. In this case I can understand why Zilch didn’t initially just consider the transaction as being unauthorised. The communication Miss U provided doesn’t show her cancelling prior to the charge being debited on 29 October 2025. She contacted L the day after and cancelled then (30 October 2025). I do appreciate Miss U says she tried to cancel in September 2025, but L incentivised her to stay. Therefore, she agreed to continue and didn’t cancel. So given the communication Zilch had at the time Miss U contacted it asking for a refund, I don’t think it was unreasonable then for Zilch to believe that Miss L had consented to it being taken. I say this because the evidence points to Miss U having an active and agreed membership with L at the time the payment was taken. In these situations, Zilch can still potentially assist via the chargeback process to dispute things. But before a chargeback can be raised, there are timescales that need to have first passed. Zilch advised this to Miss U and said she needed to wait 14 days. Before Zilch was able to consider things further, Miss U advised that L had agreed to refund her. I’m pleased to hear that Miss U was able to get her money back. Given Miss U was able to get a refund from L, I don’t believe there was anything further Zilch was required to do. I do note Zilch has said it has also refunded Miss U the fee it charged for this transaction. So given this I don’t agree that Zilch acted unfairly in not raising a chargeback and doesn’t need to do anything more. My final decision I don’t uphold Miss P’s complaint against Zilch Technology Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss U to accept or reject my decision before 26 May 2026. Paul Blower Ombudsman

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