Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • RoastUK
    • By RoastUK 9th Nov 17, 7:34 PM
    • 18Posts
    • 2Thanks
    RoastUK
    Section 75 & Chargeback claim query
    • #1
    • 9th Nov 17, 7:34 PM
    Section 75 & Chargeback claim query 9th Nov 17 at 7:34 PM
    Hi everyone,

    I'm hoping that I can find some hope from the good folk on MSE forums.

    My partner has had a bathroom renovation completed but unfortunately the work isn't it up to scratch. She has paid £3060 on her credit card and £890 on her debit card.

    She applied or the section 75 with Barclaycard and they were happy to refund her the payment until the last minute when they identified that the plumber used a merchant called Pay Leven to accept the payment.

    They have said that because the payment went to a 3rd party the chain has been broken. I've read a few articles online and it seems clear that this us a murky area regarding Section 75 claims.

    My partner has put a complaint in to the Financial Ombudsmen - they've upheld the original decision so we've escalated it to the last stage, this is where I hope anyone on here can help.

    Are there any cases out in the public domain in which a similar scenario (eg a 3rd party merchant involved) has been successful with a refund?

    I've come across something from 2006 that says creditors should be liable off there are 3 or 4 party's involved but I'm not sure whether that is relevant with it being 11 years old.

    We also contacted Pay Leven and they don't have a procedure but if a complaint was made they would look into it. They wasn't clear on how or what this complaint procedure is though.

    We're at the stage of going to the small claims court but the stress and anger this has caused has made us both ill.

    Any help is appreciated.

    Lastly, my partner has attempted to do a chargeback refund claim with Nationwide but they have refused it that. They say that because we've essentially done a bank transfer to the plumber we're not covered. That's also with the Financial Ombudsmen so we're awaiting a decision on that but we're not hopeful of getting a result with that either.

    Thanks for reading, I hope no one has to go through this themselves!
Page 1
    • eco_warrior
    • By eco_warrior 9th Nov 17, 7:37 PM
    • 47 Posts
    • 15 Thanks
    eco_warrior
    • #2
    • 9th Nov 17, 7:37 PM
    • #2
    • 9th Nov 17, 7:37 PM
    Chargebacks for this kind of thing are limited to 120 days from when the service ended and things like bank/money transfers aren’t covered either. I expect both of these reason enough to reject the claim. All banks would investigate the chargeback option first to mitigate their losses, even if you asked for section 75.
    • RoastUK
    • By RoastUK 9th Nov 17, 7:49 PM
    • 18 Posts
    • 2 Thanks
    RoastUK
    • #3
    • 9th Nov 17, 7:49 PM
    • #3
    • 9th Nov 17, 7:49 PM
    Chargebacks for this kind of thing are limited to 120 days from when the service ended and things like bank/money transfers aren’t covered either. I expect both of these reason enough to reject the claim. All banks would investigate the chargeback option first to mitigate their losses, even if you asked for section 75.
    Originally posted by eco_warrior
    Just to clarify £3060 was paid on the credit card so we've gone down three section 75 route for that. The rest was on the debit card so we've gone through chargeback for that.

    We're still within the 120 day timeline as well.

    Cheers
    • derps
    • By derps 9th Nov 17, 8:46 PM
    • 97 Posts
    • 79 Thanks
    derps
    • #4
    • 9th Nov 17, 8:46 PM
    • #4
    • 9th Nov 17, 8:46 PM
    This would prevent s.75 from applying but you can do chargebacks on credit card transactions as well so have Barclays pursued that option? If you insisted on going the s.75 route you may have skipped over the better option.
    • eco_warrior
    • By eco_warrior 9th Nov 17, 9:19 PM
    • 47 Posts
    • 15 Thanks
    eco_warrior
    • #5
    • 9th Nov 17, 9:19 PM
    • #5
    • 9th Nov 17, 9:19 PM
    This would prevent s.75 from applying but you can do chargebacks on credit card transactions as well so have Barclays pursued that option? If you insisted on going the s.75 route you may have skipped over the better option.
    Originally posted by derps
    Banks wouldn’t skip the chargeback option (which comes at no cost to them) and go straight to s75. Makes no sense.
    • eco_warrior
    • By eco_warrior 9th Nov 17, 9:26 PM
    • 47 Posts
    • 15 Thanks
    eco_warrior
    • #6
    • 9th Nov 17, 9:26 PM
    • #6
    • 9th Nov 17, 9:26 PM
    Just to clarify £3060 was paid on the credit card so we've gone down three section 75 route for that. The rest was on the debit card so we've gone through chargeback for that.

    We're still within the 120 day timeline as well.

    Cheers
    Originally posted by RoastUK
    Sounds like the method of payment is the problem for either option. Hard to see how you’d get by this but worth taking to FOS, you never know.
    • RoastUK
    • By RoastUK 10th Nov 17, 1:38 PM
    • 18 Posts
    • 2 Thanks
    RoastUK
    • #7
    • 10th Nov 17, 1:38 PM
    • #7
    • 10th Nov 17, 1:38 PM
    Sounds like the method of payment is the problem for either option. Hard to see how you’d get by this but worth taking to FOS, you never know.
    Originally posted by eco_warrior
    This is the point we was raising, I just find it incredible that the section 75 becomes obsolete because a tradesmen uses a merchant to accept credit card payments.

    When we first contacted Barclaycard they advised it was the section 75 action that needed to be taken. I'm under the impression that you can't do a chargeback for a credit card?

    Thanks
    • zx81
    • By zx81 10th Nov 17, 1:51 PM
    • 14,045 Posts
    • 14,732 Thanks
    zx81
    • #8
    • 10th Nov 17, 1:51 PM
    • #8
    • 10th Nov 17, 1:51 PM
    A chargeback can be done on a credit card.
    • eco_warrior
    • By eco_warrior 10th Nov 17, 5:35 PM
    • 47 Posts
    • 15 Thanks
    eco_warrior
    • #9
    • 10th Nov 17, 5:35 PM
    • #9
    • 10th Nov 17, 5:35 PM
    This is the point we was raising, I just find it incredible that the section 75 becomes obsolete because a tradesmen uses a merchant to accept credit card payments.

    When we first contacted Barclaycard they advised it was the section 75 action that needed to be taken. I'm under the impression that you can't do a chargeback for a credit card?

    Thanks
    Originally posted by RoastUK

    Using 3rd parties to process payments has always been a killer where Section 75 is concerned. Many people will have what sounds like a valid claim only for it to be ruled out due to no Debtor-Creditor-Supplier link. Its a massive stumbling block.
    • RoastUK
    • By RoastUK 12th Nov 17, 7:26 PM
    • 18 Posts
    • 2 Thanks
    RoastUK
    Using 3rd parties to process payments has always been a killer where Section 75 is concerned. Many people will have what sounds like a valid claim only for it to be ruled out due to no Debtor-Creditor-Supplier link. Its a massive stumbling block.
    Originally posted by eco_warrior
    This is what we appear to be experiencing.

    This is the infomation that I found online that I interpret as supporting our claim when a third party is involved...

    http://www.bailii.org/ew/cases/EWCA/Civ/2006/268.html

    6. Summary

    For these reasons we have reached the conclusion that connected lender liability under section 75 of the Act attaches to all transactions entered into using credit cards issued under consumer credit agreements regulated by the Consumer Credit Act 1974, whether they take place within a three- or four-party structure and whether they are entered into in the United Kingdom or elsewhere. We therefore allow the appeal and dismiss the cross-appeal.
    Like I say it is from 2006 but no harm in using it.

    Thanks for your replies so far btw.
    • chattychappy
    • By chattychappy 12th Nov 17, 8:32 PM
    • 6,394 Posts
    • 3,371 Thanks
    chattychappy
    The key part of S75(1) is "If the debtor under a debtor-creditor-supplier agreement ... has, in relation to a transaction financed by the agreement,"

    The 2006 judgment, taking account of developments since 1974, interpreted the three-party DCS structure broadly, allowing application in the case of what it called a "four party" structure, namely: D(cardholder)-merchant acquirer-C(card issuer)-S(merchant).

    It was argued by CCs that a "merchant acquirer" is an interloper that could potentially break the DCS chain. The court found that it didn't - they rejected strict interpretation of the "chain". However, note that a merchant acquirer is a bit different to role played by the likes of Paypal, Pay Leven or whatever.

    Given the court's willingness to bend S75(1) to take account of modern developments, I believe that if it were tested in court, S75 liability would be found to include payment processors. Indeed I think liability would be found in any situation where consumer credit is provided by a lender through any number of intermediaries provided the individual transaction remains traceable and the route is reasonably instantaneous. Put simply, the intention behind the 1974 Act is to place a lender on the hook where they finance a purchase from a supplier with whom they have a common commercial interest.

    Certainly if the OP is refused on the grounds the chain is broken, (and assuming you're not willing to finance an expensive appeal!), I would keep all the documents for a while in case we get a further judgment from a higher court.

    It is a failure of parliament not to have updated the legislation and given they haven't, a failure of regulators/consumer bodies not to have brought further test cases in order to clarify the situation. (Perhaps they have, willing to stand corrected.)
    Last edited by chattychappy; 12-11-2017 at 9:57 PM. Reason: Minor rewording for clarity/grammar.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,540Posts Today

6,811Users online

Martin's Twitter
  • I believe I can boldly go where no twitter poll has gone before https://t.co/HA0jC92gAK

  • OK I'm wilting to public pressure and there will be a star trek captain's poll at some point next week

  • I can get that. My order is 1. Picard 2. Janeway 3. Kirk. Too early to say where Lorca will end up (or would you? https://t.co/kawtCOe9RA

  • Follow Martin