Hypothetical - Direct Debit/Chargeback question

CG19a
CG19a Posts: 765 Forumite
in Budgeting & bank accounts
As said, it's a hypothetical question, to get people's thoughts.

In light of Monarch going under I've been thinking about a holiday I have booked with Thomas Cook.

A lot of people will book with credit cards etc to get chargeback and section 75 protection.

My holiday for January coming, was booked with a £50 card payment for deposit, and then I'm paying an amount each month by direct debit to clear the balance, just in the same way I'd pay off a phone bill or loan etc. In the unlikely event that Thomas Cook ran into trouble, and putting travel insurance aside for a moment, would claiming on the direct debit guarantee be an option to get the majority of the money back?

Comments

  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Name Dropper First Post First Anniversary
    CG19a wrote: »
    As said, it's a hypothetical question, to get people's thoughts.

    In light of Monarch going under I've been thinking about a holiday I have booked with Thomas Cook.

    A lot of people will book with credit cards etc to get chargeback and section 75 protection.

    My holiday for January coming, was booked with a £50 card payment for deposit, and then I'm paying an amount each month by direct debit to clear the balance, just in the same way I'd pay off a phone bill or loan etc. In the unlikely event that Thomas Cook ran into trouble, and putting travel insurance aside for a moment, would claiming on the direct debit guarantee be an option to get the majority of the money back?
    Credit or debit?


    (BTW, the answer to your question is no)
  • CG19a
    CG19a Posts: 765 Forumite
    To be honest, I can't remember what card I used for the £50, but putting that aside, would it be possible to claim the rest of it back through the direct debit guarantee?
  • Shakin_Steve
    Shakin_Steve Posts: 2,700 Forumite
    First Anniversary Photogenic First Post Name Dropper
    edited 5 October 2017 at 10:05PM
    CG19a wrote: »
    To be honest, I can't remember what card I used for the £50, but putting that aside, would it be possible to claim the rest of it back through the direct debit guarantee?
    No. But the £50 deposit would be enough to claim if it was on a credit card.
    I came into this world with nothing and I've got most of it left.
  • CG19a
    CG19a Posts: 765 Forumite
    Totally get that, but it’s more about the direct debit guarantee. In a situation like this, where a supplier doesn’t provide the service being paid for, could the DD guarantee be used to reclaim what was paid through this avenue?
  • eskbanker
    eskbanker Posts: 30,995 Forumite
    First Anniversary Name Dropper Photogenic First Post
    You'd probably be better familiarising yourself with what the direct debit guarantee actually is, at https://www.directdebit.co.uk/DirectDebitExplained/Pages/DirectDebitGuarantee.aspx, which makes it clear that it simply offers correction of administrative errors, unlike the s75/chargeback mechanisms that protect against failure to deliver goods and services....

    So, let me be the third to say that the answer to your question is no!
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Name Dropper First Post First Anniversary
    CG19a wrote: »
    In a situation like this, where a supplier doesn’t provide the service being paid for, could the DD guarantee be used to reclaim what was paid through this avenue?
    As I've said above, no.


    You agreed they could take the funds by DD. Whether they subsequently breach the contract and fail to deliver is irrelevant under the DD guarantee...that's not what it's for. You go to court (and line up with all the other creditors for 2p in the pound), or claim under section 75 if you paid the deposit by credit card (subject to a D-C-S relationship existing of course).
  • colsten
    colsten Posts: 17,597 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Shakin_Steve wrote: »
    No. But if the £50 deposit would be enough to claim if it was on a credit card.
    The minimum payment amount needs to be £100 to be covered under Section 75.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Name Dropper First Post First Anniversary
    colsten wrote: »
    The minimum payment amount needs to be £100 to be covered under Section 75.
    The cost of the item, ie a holiday, needs to be £100 (and no more than £30K). The deposit can be as little as a penny. :)
  • badger09
    badger09 Posts: 11,206 Forumite
    First Post First Anniversary Name Dropper
    A good summary here:


    https://www.moneyadviceservice.org.uk/en/articles/how-youre-protected-when-you-pay-by-card
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Name Dropper First Post First Anniversary
    YorkshireBoy wrote: »
    The cost of the item, ie a holiday, needs to be £100 (and no more than £30K). The deposit can be as little as a penny. :)

    Yes, it's about the only thing I feel some sympathy to the banks for.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards