Consumer Credit Act 1974

Optimist

Hypothetical wrote: »

It's difficult for me to view the events in more ways than one. It is a fact that the driving instructor course was bought by my wife as a gift for our son. There is no alternative scenario. My son didn't 'order' the course but clearly it had to be in his name for it was he who would receive the training.

I'm now awaiting details of HSBC's complaints procedure. Will certainly post back with progress reports!!

Thanks so far.

HSBC - Complaints Procedure

Complaints Procedure



Your custom is important to us and we want you to be entirely satisfied with the service you receive from us.
Even the best organisations sometimes make mistakes, and if we do, or we fail to meet your expectations in some other way, we want the opportunity to put things right as quickly as we can. In addition we will take steps, where appropriate, to prevent a recurrence.
Our Internal Complaint Procedure
Although it is likely that your complaint will be resolved at the first stage in the procedure, we realise that it is not always possible, so there are 3 easy steps:
Step 1
If, at anytime you have cause for complaint, please contact us by calling the relevant customer service telephone number listed on your documentation, where our trained and experienced staff will be happy to help.
We hope that you will not then need to progress beyond this first step. However, if you remain unhappy, we want you to let us know so that your complaint can proceed quickly to the next stage.
Step 2
If you feel that your complaint has not been resolved to your satisfaction, it can be progressed to the next stage.
You can write to:
HSBC Finance Limited
Customer Relations Team
P.O. Box 5140
Coventry
CV3 9ES
We always aim to provide a full response within 5 working days, but if there is reason for further delay, we will keep you informed and let you know how the investigation is progressing.
It is expected that this process will bring the matter to a mutually agreeable solution, but if you remain unhappy then you can progress to the final stage of the Internal Complaints Procedure.
Step 3
The final stage of the procedure involves referral of your complaint to the Chief Executive Officer (CEO). You may request a referral, or write directly to the following address: HSBC Finance Limited, North Street, Winkfield, Windsor, Berkshire SL4 4TD. You will need to let us know why you remain dissatisfied, and the CEO's office will ensure that your complaint is reviewed objectively, fairly and reasonably. Either a member of our Executive Complaints Office or a Senior Manager will then respond on behalf of the CEO.
We always seek to resolve complaints internally, but there may be instances when we cannot reach an agreeable solution. Either the CEO or the Complaints Compliance Manager will have reviewed the details of your complaint in all cases, and we will send you a letter confirming our final response. This means you have reached the end of our complaints procedure, and if you are still not satisfied (or 8 weeks have passed since you first raised the matter with us) you have the right to refer your complaint to the Financial Ombudsman Service. You can write to:
The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London
E14 9SR
Email: [EMAIL="enquiries@financial-ombudsman.org.uk"]enquiries@financial-ombudsman.org.uk[/EMAIL]
Website: www.financial-ombudsman.org.uk
Telephone: 0845 080 1800

shaun_from_Africa

Another way to look at this is to compare it to buying an airline ticket.

My wife/brother/sister could buy a ticket for me to travel using their credit card.
Even though they paid using their credit card, the contract (ticket) would be in my name. If any changes needed to be made, the airline would need the approval of the ticket holder (me), and not the person who paid for the ticket.
Likewise, if the airline needed to cancel the booking rearrange it for another date, they would contact me and not the person who paid for the ticket as although I was not the person who paid, it was me who was shown as having the contract with the airline, and I would be the person who would suffer due to any breech of contract.

IMO, this is no different to the case in question, and as Sect 75 is designed to cover direct contracts between the card holder and supplier of the goods or service, I can see exactly why the bank are taking the stance that they are.

Hypothetical_2

The way I see it, is that my wife bought a gift for our son.

The cost of that gift was borne by my wife and the benefit that she would expect from that expenditure was the pleasure she would experience in having assisted in the development of her son's career.

The service paid for was not supplied, the pleasure anticipated by the purchaser was not had, yet the cost of the cost of non-supply has not been recovered.

There's a matter of principle at stake here and this case will go the full course regardless of the result. If necessary, I think it will be well worth the FOS looking into the whole aspect of this gift issue.

Thanks again, btw, for your input.

DVardysShadow

shaun_from_Africa wrote: »

Another way to look at this is to compare it to buying an airline ticket.

My wife/brother/sister could buy a ticket for me to travel using their credit card.
Even though they paid using their credit card, the contract (ticket) would be in my name. If any changes needed to be made, the airline would need the approval of the ticket holder (me), and not the person who paid for the ticket.
Likewise, if the airline needed to cancel the booking rearrange it for another date, they would contact me and not the person who paid for the ticket as although I was not the person who paid, it was me who was shown as having the contract with the airline, and I would be the person who would suffer due to any breech of contract.

IMO, this is no different to the case in question, and as Sect 75 is designed to cover direct contracts between the card holder and supplier of the goods or service, I can see exactly why the bank are taking the stance that they are.

You are spot on in identifying the issue here, as being exactly the same as the OP's problem. However, I cannot agree that the name of the person for whom the ticket is valid should define who the contract is with.

If A buys a service for B, the contract could be with A or B depending on how the service contract arises
A can contract with a supplier for a service to be delivered to B, and A can pay for it
B can contract with a supplier for a service to be supplied to himself and A can pay for it.

The distinction is very real and there is not, as far as I am aware, any 'rule' which determines that it should be one way in preference to the other. Unfortunately, the distinctions between the 2 possibilities are subtle and don't readily lend themselves to a straightforward test to resolve the matter.

A roundabout way for the OP to resolve this could be for the son to sue for return of the money [ok, the supplier has gone bust] and have the action struck out because he is not the person the contract is with. This would make the other possibility the one which should stand.

Hypothetical_2

The following is academic but seems to point to a nonsensical incongruence between two not unrelated parts of consumer law should the FOS not support my wife's case that, as a gift, the cost of non-supplied services should be refunded by the credit card company.

Apparently, where faulty gifts are to be returned and a refund sought, the onus is on the purchaser to seek the refund unless on the receipt (preferably a bit the shop keeps eg the debit/credit card slip) note that it's a gift and who it's for, eg "bought as a gift for Bob", and the rights are transferred. http://www.moneysavingexpert.com/shopping/consumer-rights-refunds-exchange

So, if our case were to fail, the implication is as follows:-

1. Where A buys a gift for B using a credit card supplied by C, the onus is on B to sue for faulty goods thereby circumventing the qualifying criteria under s75 of the Consumer Credit Act 1974, but,

2. Where A buys a gift for B using a credit card supplied by C, the onus is by default on A to return faulty goods.

If that were to prove to be the case, it would be a nonsense!

p4tti

Stick to your guns Hypothetical your wife (debtor) used the card from cc co. (creditor) to make a purchase from Key Driver Training (supplier).

Some years ago I had a similar problem as the third party. My MIL's card (second card on husbands account) was used to pay the balance of a holiday booked in my name to afford the 4 of us protection under section 75 (always use a cc for large purchases).
Company went into admin - no holiday. CC company said sorry no debtor/creditor/supplier agreement as neither named card holder or secondary card holder were the lead name on the booking.
I issued small claims proceedings (jointly with my MIL named on the court documents) and although it took just over a year to sort out, it was ruled there was debtor/creditor/supplier agreement and we were awarded full re-payment, costs, interest and extra compensation I had asked for.
Interestingly the cc company still did not want to pay up until threatened with Bailiff's.
The money was refunded to the cc and we had to request a cheque for the difference between the amount oustanding (the disputed amount) and the amount awarded by the small claims court.

Hypothetical_2

Thanks p4tti. We will be sticking to our guns.

If after reaching the FOS stage we don't have an acceptable result, it's certainly our intention to progress the issue through the courts.

Hypothetical_2

As expected, HSBC have issued their final response which is to deny liability.

I've passed the matter over to the financial ombudsman and will take it up with the small claims court if I don't get a positive result.

Will post back with progress!