Section 75 Ex Gratia offer

joemarch1

Hi,

I'm hoping you can help me.

I initiated a charge back for faulty goods for a sum of £2350.00 back in May.

The bank instantly refunded my credit card and the dispute with the retailer began, for which i submitted all my evidence.

Today i received a letter from HSBC - my card provider, advising that they are prepared to offer an ex gratia offer of £1900.00.

Their statement reads:

"As HSBC Bank PLC has no direct knowledge of the facts or issues you have raised in your dispute with XXXXXXX, it is unable to determine that a breach of contract and/or misrepresentation has occured on the evidence you have presented to date. However, not with standing this, the bank is prepared to make an ex-gratia offer of £1900.00 ("the offer") in full and final settlement of your claim and without admission of any liability basis.

So my questions are these:

What is an ex-gratia payment?
Does this leave me liable to be charged £2350 by the retailer thereafter?
In any event can the retailer impose a claim against me in the courts?

many thanks in advance for any help or advice one can provide on this subject.

Candyapple

joemarch1 wrote: »

Hi,

I'm hoping you can help me.

I initiated a charge back for faulty goods for a sum of £2350.00 back in May.

The bank instantly refunded my credit card and the dispute with the retailer began, for which i submitted all my evidence.

Today i received a letter from HSBC - my card provider, advising that they are prepared to offer an ex gratia offer of £1900.00.

Their statement reads:

"As HSBC Bank PLC has no direct knowledge of the facts or issues you have raised in your dispute with XXXXXXX, it is unable to determine that a breach of contract and/or misrepresentation has occured on the evidence you have presented to date. However, not with standing this, the bank is prepared to make an ex-gratia offer of £1900.00 ("the offer") in full and final settlement of your claim and without admission of any liability basis.

So my questions are these:

What is an ex-gratia payment?
Does this leave me liable to be charged £2350 by the retailer thereafter?
In any event can the retailer impose a claim against me in the courts?

many thanks in advance for any help or advice one can provide on this subject.

Are you sure you have been refunded? Usually with a chargeback sometimes the retailer will refund automatically and then depending on the outcome of the chargeback, deduct the money again and give it back to the retailer or it will remain refunded if you won your case.

Sounds like HSBC may have sided with the retailer and given the money back to them and to keep you happy they are now offering you a one-off sum to keep you quiet.

An ex-gratia payment is a sum of money paid when there was no obligation or liability to pay it, a goodwill payment you like.

Was the retailer based in the UK?

Did you pay and they didn't send goods?

joemarch1

Hi Candyapple,

yes, the bank credited me within two weeks of the claim being initiated but advised should they find in the retailers favour this could be reversed.

The retailer was a UK based company that had sold me vehicle parts for my car which arrived damaged, and when some of them where returned no refund was ever forthcoming - hence the claim

Candyapple

If you've already been refunded then sounds like you are quids in!

Does this leave me liable to be charged £2350 by the retailer thereafter?

The retailer has a certain amount of time to respond to the card company's request of further information if they want to defend a chargeback. If they haven't bothered, then the initial refund you received, is yours.

The retailer cannot at a later date try and charge you again for the £2,350.

In any event can the retailer impose a claim against me in the courts?

Only unless they have responded to the card company's chargeback information request and the card company decided against them, the company can try and take you to court privately if they think you really do owe them money, however I would suspect they wouldn't get very far given that a judge would want to know why the card company did not decide in their favour.

The £1,900 is a goodwill payment from HSBC. It's probably best to keep it aside for now just in case they realise that you have already been refunded. That way if they realise their mistake, you have lost nothing. And if they don't, you have £1,900 to spend as you wish.

Marchitiello

I would speak to the bank directly on the phone as I do not read it as the other posters above.

To me the initial refund/chargeback was not final and pending investigation. After the investigation they have not been able to determine that you are entitled to such chargeback of £2350 but they are still willing to give you £1900, so in my eyes they will effectively take back the £450 difference.

Only way to know for sure is to speak to HSBC.

molerat

Chargeback or S75 ? Two completely different things.

CKhalvashi

As above, I've read it as the £2250 will be recharged to you.

It won't be £1900 of free money.

joemarch1

the opening of the letter state:

WITHOUT PREJUDICE SAVE AS TO COSTS


Followed by......

I understand that you wish to persue a claim under section 75 of the Consumer credit Act 1974 ("Section 75") in connection with the above purchase.......

chattychappy

Yep, the chargeback will be reversed because, very likely, the retailer has objected and the dispute cannot be resolved in favour of the bank.

So that leaves them exposed via S75 to you. Based on your evidence, they think they might well be on the hook. So they are making an offer to the tune of just less than the purchase price.

Whether you take it or not depends on how strong you think your misrep/breach claim is. If it went to court and the bank has no evidence to support its defence, you might well get the full amount of your claim (most likely the purchase price, perhaps even more, certainly the court fee). On the other hand if the retailer puts in evidence, the bank might find it can defend the claim and you could lose.

So really it comes down to how much you think you are owed and how strong your evidence is. The bank's willingness to offer you the majority of the transaction value suggests it doesn't fancy its chances.

Nothing to stop you going back with a counter-offer. Perhaps if you give us more information about what went wrong, people can advise further.