Protection under Section 75

pbell

Hi, I understand consumers making purchases with a credit card have protection under Section 75 but is there still protection if purchases are made on behalf of other people? For example, if I organise a group trip, collect the money from each passenger and pay the travel company with my own credit card, is the whole amount of the purchase protected if, for instance, the travel company ceased trading before the trip.

[Deleted User]

Technically not, but you might be able to argue a case as presumably the success of your holiday depends on the entire group.

bris

No, in no way is this covered, its actually one of the example of what's not covered. As long as your personal payment is over £100 then you and you alone are covered.

eddddy

In this 2013 article, Martin Lewis suggests it's a grey area....

Are group purchases protected?

There appears to be some conflicting information on this, but in general, if you’ve paid for a group booking, such as a holiday payment for friends or non-immediate family, you should be protected for the full payment. Yet for those who want to play it safe, the best bet is to ask others to pay their own way where possible.

Let’s say you pay for a whole group of mates to go on holiday with your credit card, and they pay you back their portion. Section 75 protection becomes confused if the holiday firm goes into administration, as there is some argument over who is part of the credit card contract.

Although Trading Standards told us the payee “is entitled to a compensation of the full amount from the credit card company“, the Financial Ombudsman says there’s a chance you’ll not be covered for the full amount, possibly only being entitled to your own proportion of the payment. So whilst payments for partners and children are easier, others are not so clear-cut.


Link: http://justice4.co.uk/martin-lewis-on-section-75/

TBH, reading the legislation, I can't see the basis for it not being covered, but I'm not a lawyer : http://www.legislation.gov.uk/ukpga/1974/39/section/75


BUT... if you buy tickets from a travel agent, and the airline fails - you might not be covered by section 75 for other reasons.

D_M_E

There was a case a few years ago where a hamper company went broke.

Some of its customers were collecting money from various friends and sending it on to the company using debit and, I believe, credit cards.

When the company went bust there were several of these people made successful claims for refunds from their card providers for all the money which had been forwarded, so you could be in with a chance of making a claim as your circumstances would be very similar.

[Deleted User]

Get the members of the "group" to pay for their trip on their cards...problem solved

chattychappy

S75 covers breach of contract where the contract is between the cardholder and the merchant.

As noted above - S75 doesn't list any particular exceptions. People love to come up with this kinda stuff - eg "it's for business so you're not covered". Also, the fact of a card paying out or not paying out doesn't mean S75 does or doesn't cover a situation. They might pay out because it's cheaper than having the argument or have misunderstood the law, or refuse because they think they won't be challenged. Only a court can settle matters of interpretation, though the FOS often gives guidance.

In this case, I believe it comes down to the contract. If X contracts with merchant to provide a holiday for X, Y, and Z, then all three would be covered. However, if X, Y and Z have separate contracts with the merchant but X pays for them altogether on his CC, then only X would be covered.

So it's a grey area because I can imagine paperwork/T+Cs are different in different situations. I remember a booking I made for me and a friend. The T+Cs made it quite clear that there were separate contracts formed for all travellers. As the guy making the booking I was acting as agent for anyone else on the same booking. I'm pretty sure there would be no S75 cover in this situation, unless the "agency" concept could be unwound first.