Originally Posted by
corporate-wage-slave
This has happened before, albeit some years ago. Unfortunately BA treats this as a reimbursement against the original ticket price, and thus refunds against the ticket method of payment. If it was compensation, then it's clearly specified in Article 7 to be to the passenger. Reimbursement, in Article 10 doesn't have the same clear statement, it is sort of implied but it's just not as clear cut. So you could try CEDR on this, but at least on paper BA did what was required.
BA might also try and cite Anti-Money Laundering concerns in defence of their actions. Not that I'd agree with that, but it's a commonly cited reason amongst businesses as to why refunds have to be paid back to the same method used for payment.