Section 75 - do you have to be the primary card holder to claim

Tillybob

To cut a long story short, I need to make a claim under section 75 for a car that I bought however, my husband is the primary card holder & I am an additional card holder. Do I still have the same rights?

grumbler

• When the primary cardholder does not pay. Additional cardholders, etc.
  If you have an additional card for a partner, child or friend and this card is used to make a payment for a item you subsequently need to claim for, you'll need to show the item provides some benefit to the primary cardholder to be covered.
  So if it was a family car or gift for the main cardholder, this is likely to be OK. But a solo flight for the 'plus one' isn't.
  This isn't technically written into the legislation, but is based on a ruling (62/02) by the Financial Ombudsman in 2007.

MSE article: Section 75 refunds

Tillybob

Thanks Grumbler.
I don't know if you can answer these questions: If I've got a CCJ against the company which they've failed to pay & according to bailiffs have left the business premises can I still claim & if I'm successful, does the credit card company take the car?

grumbler

If in light of the above your purchase is covered by S75 then you definitely can claim from the CC company. However, I don't know whether the existing CCJ is sufficient or you'll need a new one if they refuse to pay voluntarily. And I can only guess that they would want to take the car if they pay the full refund. IMO it's the most realistic and logical expectation.

chattychappy

grumbler wrote: »

MSE article: Section 75 refunds

The general rule is the S75 doesn't help additional cardholders.

That MSE article is odd because 62/02 was a case where the FOS turned an additional cardholder down. It doesn't suggest any exception on the basis that the main cardholder derives a benefit.

But I have seen this argued elsewhere - dubious in my opinion. There has been no ruling by a senior court on this issue so the situation might change. I remember the OFT saying that they thought that additional cardholders should be protected on the principle of agency - ie when using the card they are acting as agent of the main cardholder in obtaining finance.

The best chance is if the main cardholder not only benefits from the purchase but in some way instructed the additional cardholder to make the purchase on his/her behalf. Else IMHO the purchase chain is broken.

No harm in giving it a go though.

dazza.mk

chattychappy wrote: »

The general rule is the S75 doesn't help additional cardholders.

That MSE article is odd because 62/02 was a case where the FOS turned an additional cardholder down. It doesn't suggest any exception on the basis that the main cardholder derives a benefit.

But I have seen this argued elsewhere - dubious in my opinion. There has been no ruling by a senior court on this issue so the situation might change. I remember the OFT saying that they thought that additional cardholders should be protected on the principle of agency - ie when using the card they are acting as agent of the main cardholder in obtaining finance.

The best chance is if the main cardholder not only benefits from the purchase but in some way instructed the additional cardholder to make the purchase on his/her behalf. Else IMHO the purchase chain is broken.

No harm in giving it a go though.

Chattychappy,

I think you are being a bit extreme in saying the rule is that to Additional Cardholders. The FOS case you referred to was similar to the (non) precedents (such as the link below), ie the additional cardholder bought land in her name, as her pet project with no involvement of the cardhodler.

Link below also sets out the OFT's view on agency.

But as I see it:

a) Additional cardholder making purchase for their own benefit - dodgy ground unlikely to succeed based on previous legal cases (although not precedent) and FOS cases.
b) Additional cardholder making purchase for main cardholder, no precedent, but previous lower court judgements comments have hinted that this would be covered, which of course future cases may take under advisement (although not be bound by)



http://www.lacors.gov.uk/lacors/ContentDetails.aspx?id=651

chattychappy

Thanks for digging that out, it is a while since I read it. As far as I know there has been no change of law or more recent precedent that changes the position. The OFT was clearly unhappy. I wasn't aware of the lower court judgments to which you refer.

But I still disagree with the MSE guide quoted "you'll need to show the item provides some benefit to the primary cardholder to be covered" - I think we are a long way from coverage on that basis.

Of course, for fear of precedents opening flood gates, there is always the (minuscule) chance of CCs paying out.

InsideInsurance

Tillybob wrote: »

does the credit card company take the car?

It would depend on the settlement and these things are generally negotiations.

One option would be a refund minus use that you've gotten from the vehicle and they get the car. The other option is they offer you a lower settlement figure and you retain the vehicle.

Generally banks dont want cars and so they may be keen to negotiate a settlement where you retain the vehicle.

I havent gone hunting for your previous threads to actually see what the cause of the dispute is but evidently if there is a major safety issue or you've had no use from the vehicle etc then this may impact the options and offers