Section 75 claims where Sage is the middle agent

Davidmm

Hi,
I have just had a Section 75 claim rejected by Santander. The reason is that the online retailer used Sage to collect the credit card payment. The consequence is that there is no direct link between me, the trader and Santander. Santander's credit agreement is with Sage and not the seller.

I can understand that now but it does seem to be a loophole for traders to avoid Section 75 claims.

Is it usual for web sites to make it clear that credit card payments are being processed by a handling agent? I can't say that I've noticed that before.

Any comments?

jonesMUFCforever

Can you give us more information about the transaction?
You are right it does not appear fair if you were dealing direct with a retailer rather than going through a 3rd party.

Consider rejecting their reply (they should have already given you information about making a complaint) and take it further.

grumbler

Davidmm wrote: »

Any comments?

There are many discussions on this matter (Paypal mainly) here, some are pretty serious:

Credit cards that allow Section 75 claims against PayPal?
section 75
...

MSE article: Warning! Don’t use PayPal to pay on a credit card

Does PayPal ever work for Section 75?

There could be circumstances where the necessary relationship may exist. For example, larger retailers may use it as a “merchant acquiring service”, which means it acts as a traditional payment processor. Yet, it's very difficult to tell – so to be on the safe side, assume not.
If you’re going to get really nerdy on this (ignore this bit if you don’t want nerd-dom), it’s worth noting there are some court rulings which can be read as contradicting the Ombudsman’s view. In other words, that Section 75 does apply to PayPal.
Yet to push that you’d need to go to court. While there's a chance a card firm may just pay out if you did take it to the small claims court, equally true is it may decide to fight it all the way, which could be time consuming and potentially costly.

bigadaj

It's an interesting point and whilst I'm well aware of the PayPal issue and don't use them, I have processed payments through sage, mainly for investments and financial transactions. It wouldn't have immediately struck me as a problem with third party payment and I have some sympathy with the op.

More details on the transaction and the process would be helpful in reasoning this.

pvt

David,

Did the transaction appear on your credit card bill with Sage's name against it, or with the name of the retailer/seller that you had used?

redpete

Davidmm wrote: »

I can understand that now but it does seem to be a loophole for traders to avoid Section 75 claims.

I think the loophole is that with direct transactions the CC company is jointly liable with the supplier - not I think a situation the original legislation was meant to create.

bris

It was my understanding that Sage is a proper merchant who the retailers have accounts with, unlike Paypal who has accounts with the customer and not the retailers.


Santander are at it with this one, I would seek clarification from the FSA as I believe they are trying to wiggle out of it.

Davidmm

Hi,
There have been developments.
The seller paid up. I await seeing the credit in my CC account
I've sent a complaint to the Financial Ombudsman about the decision of the CC company.
Here is the text of my letter to my CC company which gives more details.

We await developments.

David

*****************************************************************************************
Thank you for your letter of 7 December 2015. I am of course disappointed at your decision, which I take is final, and why you came to that conclusion. I am sure that you know what you are doing but wonder if there might be a flaw somewhere.

I have been an eBay user for 15 years and am aware that there are issues in some e-transactions, for example, when an item is purchased using PayPal and the PayPal account is funded by a transfer from a credit card. I use various methods to fund my PayPal account, that is my decision, and have in the past found the eBay/PayPay system of guarantees quite robust.

In my case however, the order for the item was placed direct with the seller when the cards details were provided in a telephone call. It was not until I subsequently received an invoice via email that it showed that the payment was processed by Sage Pay. I had no choice in the matter. The choice was entirely at the discretion of the seller. I cannot believe that our very wise and highly paid lawmakers ever intended that Section 75 of the CCA could be circumvented in such a simple manner. It seems to me that Sage Pay must be the authorised agent of the seller and is acting entirely on behalf of the seller. It certainly isn't acting on its own or my behalf. Consequently I have complained to the Financial Ombudsman Service about your decision. I have removed the confidentiality marking of your letter.

Some good news. I advised the seller in a cardboard email [a stiff one] that my Section 75 claim had been rejected and that I was considering what further action might be taken. [I was thinking about an application to the County Court as their form was much shorter and easier to complete than the forms from your Chargeback Team.] Anyway that did the trick. The seller arranged for both faulty machines to be collected yesterday. I had an email from them today with details of the refund being made, via Sage Pay of course. We shall see if it ever appears in the CC account.

grumbler

Davidmm wrote: »

...I cannot believe that our very wise and highly paid lawmakers ever intended that Section 75 of the CCA could be circumvented in such a simple manner. ...

I can. They never intended it to apply to CCs actually and failed to amend it long time ago at least to exclude CC transactions.

S75, if applied to CCs, is a nonsensical archaic law, unique for UK. In fact it's just a legal loophole abused by customers. Hardly a surprise that CC companies use every possible excuse to fight back.

Does it really make any sense to you that CC companies, when providing unconditional 1p credit on purchasing anything from any retailer, become liable for the full cost of the item you buy if the retailer pulls a fast one?

realaledrinker

Interesting to see how this develops. I'd always assumed that Sage's service was integrated with their point of sale offerings to small businesses but was no different to the likes of Worldpay.

Davidmm

Hi,

Here is my letter sent to Santander today which gives the current position

"Thank you for your recent letters and attachments.

Can you please clarify if these forms are for action under your “chargeback scheme” which Ms Becca Saunders referred to in her letter of 7 December to me [a reply to my 16 October 2015] or are for a Section 75 claim? I assume the former.

I do so because in her letter, Ms Saunders confirmed that I did not have a valid claim under Section 75. I replied to her on 16 December 2015 concerning her decision and advised her that I was intended to raise the issue with the Financial Ombudsman Service. My 16 December 2015 letter has not been acknowledged by Ms Saunders although I still hope to have a reply in due course.

I have however heard from the Financial Ombudsman Service regarding when they will take on the case."

**************************************************************************************************************************

I've now had a refund from the retailer and they collected the faulty mowers free of any charge to me.

The only issue now is the justification for Santander's original rejection.

I've been a customer of Santander going back to the 1968 Girobank days when I worked in PO Telephones. In the last few weeks I've set up our current, Savings, Flexiplan, ISA and Mastercard accounts ready to switch. With savings at 0.1% interest I feel a cruise in the Med coming on.

Just had a call from Santander who have just had the notification from the Ombudsman. Not any of the people who sent the letters. Had to explain it all again. Again had Paypal quoted at me.

Since this started I have noticed the number of times the CC transaction uses Sage Pay even where quite large retailers were involved.

.