Credit card insurance question

matstuart

In about 2010, I paid for an investment for land with my credit card and had in mind to pay the card off quickly. I paid £5,000 by credit card, but shortly after making this investment, I fell upon hard times and I am still lumbered with the card debt.

Anyway, in 2011, I received a phone call to say that the company had been shut down. A few months back during the summer of 2012 I received a letter from receivers saying that the investment had no value, never did have the value I was told it was worth when I purchased it, and therefore no return payments will be made. The director is missing and can't be found. There's no money in the company account. All the usual stuff that points to this being a scam.

Basically, I am wanting to know if I am able to make an insurance claim through my credit credit card after so long since the payment was made.

I'd appreciate your advice on this as I am swimming in a little bit of debt here that I could do without.

Thanks.

InsideInsurance

"Insurance" would depend on the terms of the policy in question and you would need to read whatever bonus insurance your credit card gave.

I think however you are not actually talking about insurance but instead about Section 75 protection under the Consumer Credit Act. If this is the case then the lender is held jointly liable with the merchant for the purchase that you made.

Clearly as your talking about an "investment" a lot more detail would be needed to know if there is a reasonable prospects of success in making a claim. Evidently with a lot of investments there is a chance that you'll lose your initial stake.

Out of curiosity, what was the organisation you paid? An estate agent or something else? Did you pay them directly or via a payment processor like PayPal?

If you have legal expenses/ protection on your home insurance it may be worth a call to them both for general advise and secondly to see if they'd take on the claim on your behalf

matstuart

Thanks for your reply. Sorry it has been so long since you did, but I have a further question pertaining to insurance on the home. I did have insurance with Aviva that covered both home and business insurance at the time of purchase, but now I am with a different insurer... what is the legal obligation of the old insurance supplier Aviva with regards to helping me pursue a claim on the basis they insured me at the time of purchase?

Having read up on Section 75 protection under the Consumer Credit Act, I think you are right and this is what I mean when talking of insurance. I was misled about the purpose and status of the land I had purchased meaning no plans were ever drawn up to develop on it and it has no application pending on it for the next 20 years from what I have been informed. I was also hugely misled about the value of it.

With regards to how I paid; I paid a deposit of £500 via PayPal which came off of the credit card, and then I paid a further £4,500 directly from the card a few weeks later.

Finally, would I not be able to approach the credit card company directly to make a claim?

Thanks.

opinions4u

You may well have a valid S75 claim for the full amount. I'd certainly pursue it in your shoes.

But I cannot believe people are so stupid as to get involved in such "investment" schemes. I've been reading about this sort of scam in the popular press for 30 years.

It seems not quite right that a credit card company should have to pick up the bill for somebody who was trying to make a fast buck.

If, however, the law is on your side then use it. Good luck.

Here's some links that may or may not be relevant:

http://www.fsa.gov.uk/consumerinformation/scamsandswindles/investment_scams/land_banking

http://www.fsa.gov.uk/pages/library/communication/pr/2010/122.shtml

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/86/86.pdf

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/62/62.pdf

http://www.legalbeagles.info/forums/showthread.php?36935-Is-a-Land-Banking-scam-covered-by-The-Consumer-Credit-Act-1974