MSE News: 'I got £23k back under Section 75 after paying just £200 on credit card'

molynda

I can't believe most posts are unsupportive of the consumer. This is a contractual benefit of having a credit card and it had been used correctly in this case. The company offered this benefit to their cardholder when she signed up. Heck, card companies even advertise this benefit to get you to sign up, but then they've tried to get out of it when someone actually needs to claim (unsurprising...).


Next time anybody feels sympathetic towards the banks just think about how banks relentlessly pursue the individual with money when chasing down payment for a joint loan. No sympathy or reason is shown here; if one party has the money you pay it back because that's what your contract states. This is exactly the same thing; you've lost money and want it back quickly so you use the options available to you under the terms of your contract, which is section 75 😊

eddddy

molynda wrote: »

I can't believe most posts are unsupportive of the consumer.
...

Maybe I'm just a bit too cynical, but I think there's an underlying feeling of "people who spend £23k on a kitchen have more money than sense, I really wish they had lost their money, it would have served them right".

So it's not really 'unsupportive of the consumer', it's 'unsupportive of people who have £23k to spend on a kitchen'.

But maybe I'm wrong.

molynda

You're probably right eddddy, it just winds me up as I've been through this process myself and had the same comments. I claimed 8k from M&S Bank for a car that turned out to be a lemon after 24 hours. The dealer wouldn't lift a finger and M&S bank made you feel you were doing something wrong by claiming from them instead. Nine months later and I got a full refund via the Financial Ombudsman.


Claiming is not a speedy or pleasant experience and this consumer would have had a nightmare over the last 12 months whilst the bank tried to wash it's hand of their contractual obligations.

brightonman123

£23k for a kitchen??

nevmon

bongoali wrote: »

1. Now who's scrambling around for a technicality. Moving on from synonyms you are now linking a noun to an adjective, to serve what purpose?
2. Do you suffer from must-have-last-word syndrome?
3. I did question an element of what nevmon had written

They did pay it and they did lose it.
4. Are you nevmon in disguise?

Hi this is nevmon.
Bongoali I am sure we can argue without being rude; after all this is a learning and exchange of opinions. And I would happily apologise to you for a typo that I make.

By this bit of legislation the legal point you (and Martin) make is right; and the buyer can claim not just what they used the CC for but also for the rest (which was NOT borne by the CC).

I disagree your point because I think that it is the fairness intended of any piece of legislation, that must be the guiding factor.

I much appreciate that Grumbler understood the point I was endeavouring to make, and that is: ... the balance was paid not by the CC, hence it was 'dishonest' to reclaim from CC for the amount not borne by them

When I pay for my holidays, goods etc (as advised by Martin/MSE) I use the CC to pay the whole amount; such that: If I have paid the whole value of the item by CC, and I lose the goods because of some mishap on the seller; then what I am fully insured and justified to reclaim from CC is the WHOLE amount paid via CC.

Thanks.

Crabman

VT82 wrote: »

Agree with the general sentiment here. Tesco are unfairly £20k+ out of pocket, and made out to be the bad guys by MSE to boot.

And yes, it opens up a world of loopholes. Sounds like it's the law that needs changing if anything.

There are loopholes going the other way too. Countless section 75 claims fail because there isn't a debtor-creditor-supplier link.

Section 75 also entitles the creditor to an indemnity from the supplier for damages and the cost of defending claims from the debtor. Provided the supplier is solvent and has assets, the credit providers won't be out of pocket.

You just have to search the following site for "section 75" to see that the overwhelming majority of cases are not upheld:

http://www.ombudsman-decisions.org.uk/

The fact in this case is that Tesco should have paid up when they had the chance. Yet we know that because credit providers fight these claims hard and obstruct consumers, they get away with claims where the consumer doesn't escalate to the ombudsman or court. It's an established strategy and it does deter consumers who simply accept the credit provider's position.

You talk about changing the law and I agree - the law needs to change to stop company directors saddling firms with debts, siphoning off funds and deliberately conning customers by taking payment, liquidating the company and proudly setting up a new one with a slightly different name. That would be an excellent way to reduce section 75 liabilities for credit providers.

Wardie13

Does the £30k limit include or exclude VAT?

grumbler

VAT is a business tax that consumers have nothing to do with except paying it. A price without VAT makes no sense to any consumer.
CCA stands for Consumer Credit Act.

Monkeyballs

It's funny really, they paid £200 on their credit card and transferred £22k from their bank account.

I wonder how much the business would have saved by hot having the entire transaction paid by credit card and how much of that saving was passed to the customer to tempt them into making the purchase?

MB

patrick1

The payout doesn't bother me. Tesco would have fully analysed all the risks and potential exposures before getting into the credit card game.

There are probably many thousands of people whose claims are rejected by Tesco that in reality are fully entitled to a refund but don't go on to appeal. It's the usual case that those that know their rights and are willing to fight end up in a better position. It's much the same as insurance companies, banks and airlines who deny valid claims in the knowledge that most people will give up within the first couple of rounds of rejections.

Let's not forget that Tesco Bank's profit (ie. excluding supermarket profit) this year was £194 million and mainstream bank profits are generally in the billions per year. Profits from the credit card business massively dwarfs any Section 75 losses.