Consumer Credit Act 1974

Hypothetical_2

My wife bought a driver instructor course for our son and paid for it using a HSBC Mastercard.

Part way through the course the instructing company went into liquidation and our son had at that point only completed a number of revision papers prior to sitting the theory test.

We claimed from HSBC Mastercard for the return of our expenditure (£1726) under Section 75 of the Consumer Credit Act 1974.

After initially crediting the credit account with the full amount, HSBC are now saying that we don't have a right to any refund since the expenditure was to the benefit of a third party and so we can't demonstrate a valid 'debtor/creditor/supplier' agreement.

Advice welcome!

Optimist

I'm guessing that your wife used a card in which you are the primary holder and she is the secondary holder. If so I fear the bank are correct. The transaction must benefit the primary holder.

Hypothetical_2

Just to clarify.

My wife is the primary holder of the card and it is in her name.

The course was bought as a gift for our son.

fluffnutter

Is the son the 'third party' then?

Optimist

Hypothetical wrote: »

Just to clarify.

My wife is the primary holder of the card and it is in her name.

The course was bought as a gift for our son.

Interesting that the bank are saying you cant buy a gift on your card as it wont be covered.

I would suggest your next action is to go through the banks complaint procedure then refer it to the Ombusdsman. I fear you have to go through the complaints process first

magpiecottage

It seems to me that if the primary cardholder purchased the course as agent for the beneficiary (i.e. the mother bought it and the son paid her back) then the card provider (HSBC) may have a case.

On the other hand, if it was a gift then the mother purchased it so she could enjoy the the benefit of her seeing her son benefit.

Had it been driving lessons, I think HSBC would have been in a very difficult position. This is, though, far less clear.

She is entitled to complain, though.

fluffnutter

If optimist is indeed correct (and I struggle to interpret this differently), then that's a load of billy-bollox quite frankly (although a more elegant way of phrasing it is probably indicated when complaining). How on earth can gifts not be covered? It's a complete irrelevancy that the course was for your son; he's not part of the contract.

But perhaps speak to an expert. All I've done is google!

Hypothetical_2

fluffnutter wrote: »

Is the son the 'third party' then?

Third party was my term. HSBC claim that my son is not party to the numbered account.

I enclose the body of the letter.

Optimist

I now see what they are saying and the reasons for saying it, and my view is that they are highly likely to be correct in their interpretation. That said don't give up, let the Ombudsman have the final word.

fluffnutter

Regarding the legalities of it, I personally couldn't comment. But I'd certainly pursue it if I were you. The contract is between your wife and the supplier. The supplier has failed in its duty. HSBC as the creditor, is liable. Seems perfectly straightforward to me. I assume that you never expected any reimbursement from your son? Make sure HSBC know it was a GIFT and keep complaining.

Hypothetical_2

Optimist wrote: »

I now see what they are saying and the reasons for saying it, and my view is that they are highly likely to be correct in their interpretation. That said don't give up, let the Ombudsman have the final word.

The course was bought as a gift.

I have asked HSBC to supply details of their complaints procedure.

Thanks.