The complainant made a booking through a travel company and made payment by means of an immediate transfer. The travel company was liquidated three weeks prior to the agreed date of travel.
The Bank informed the complainant that they were unable to submit a reversal request due to the payment being made by means of an immediate payment and due to the travel company being liquidated.
The Bank informed the complainant to contact the liquidator appointed to attend to the winding-up of the travel company. The evidence placed before our Office indicated that the complainant entered into a valid contractual relationship with the travel company and as such the payment was not made erroneously to the travel company.
Our Office concluded that on the probabilities, it would serve no purpose to submit a reversal request to the travel company having been placed in liquidation and furthermore that the liquidator would be prohibited, by statute, from consenting to the refund of the funds paid by the complainant as the liquidator may not prefer one creditor above another. What this means is that the liquidator cannot allow the Bank to refund the complainant’s payment, whilst other creditors in a similar position such as the complainant are not reimbursed. Naturally, there would not be enough funds to refund everyone because the travel company is now insolvent, which means that its liabilities exceed its assets.
If the payment was made to the travel company by means of a card transaction, the complainant would still not have been able to submit a chargeback request in accordance with the applicable card rules as the first point of contact in order to initiate a chargeback should be with the liquidator appointed to attend to the winding up of the travel company.
We therefore could not make a finding in the complainant’s favour.
Principle: Banks are unable to take responsibility to reimburse customers who entered into valid contractual relationships with a merchant and in instances where the merchant is liquidated.
