Credit card for one off purchase

cazziebo

Thanks everyone. That's interesting about the s75.

We both have annual worldwide insurance so maybe that will be enough. It will be a stable airline and reputable hotels so guess the potential for something going wrong is minimal, and any other eventuality would be covered by insurance.

We can afford it - mortgage paid off, kids left home, live quite frugally, plenty in the bank. I'll use my debit card.

Thanks for all your input - really appreciated.

Terry_Towelling

Thankfully, OP has made her decision but I am still wanting to push the issue of when S75 applies - sorry. Consider the following three scenarios (and please jump in if I've got these wrong):-

1. Additional c/h makes a purchase for a friend. S75 cover? NO
2. Additional c/h makes a purchase for themselves. S75 cover? NO
3. Additional c/h makes a purchase for the main c/h. S75 cover? YES

In all three scenarios, the purchaser is the additional c/h. In all three scenarios the 'debtor' is the main c/h because they are the individual who entered into the credit agreement with the CC provider.

So, what is it that makes scenario 3 different to 1 and 2? It can only be the fact that, in scenario 3, the main c/h (the 'debtor') is the primary beneficiary of the purchase. Surely this logic has to carry through all possibilities. I.E. where the main c/h buys something for someone else, they are not the primary beneficiary of the purchase and no cover applies.

If the main c/h buys something for themselves and one (or more) other(s) to share equally, they will be one of several equal beneficiaries but not 'THE' primary beneficiary. Does being one of several equal beneficiaries rather than 'THE' primary beneficiary have a bearing?

Apologies for pushing the issue but I'm struggling with the apparent inconsistency of logic thrown up by a comparison of 'additional c/h' purchases and 'main c/h' purchases.

eskbanker

Terry_Towelling wrote: »

Thankfully, OP has made her decision but I am still wanting to push the issue of when S75 applies - sorry. Consider the following three scenarios (and please jump in if I've got these wrong):-

1. Additional c/h makes a purchase for a friend. S75 cover? NO
2. Additional c/h makes a purchase for themselves. S75 cover? NO
3. Additional c/h makes a purchase for the main c/h. S75 cover? YES

In all three scenarios, the purchaser is the additional c/h. In all three scenarios the 'debtor' is the main c/h because they are the individual who entered into the credit agreement with the CC provider.

So, what is it that makes scenario 3 different to 1 and 2? It can only be the fact that, in scenario 3, the main c/h (the 'debtor') is the primary beneficiary of the purchase. Surely this logic has to carry through all possibilities. I.E. where the main c/h buys something for someone else, they are not the primary beneficiary of the purchase and no cover applies.

If the main c/h buys something for themselves and one (or more) other(s) to share equally, they will be one of several equal beneficiaries but not 'THE' primary beneficiary. Does being one of several equal beneficiaries rather than 'THE' primary beneficiary have a bearing?

Apologies for pushing the issue but I'm struggling with the apparent inconsistency of logic thrown up by a comparison of 'additional c/h' purchases and 'main c/h' purchases.

I'm still unconvinced about the existence of any 'primary beneficiary' test (where is this sourced from?) and so perceive all three of your examples to be outside of s75 coverage.

My understanding remains that the account holder has to be the person named on the purchase as the customer in order to qualify for s75 protection and that such protection isn't negated by (some or even all of) the purchase being for someone else's benefit, but like yourself happy to be corrected if someone comes up with something suitably definitive (not the questionable MSE s75 article or the like!) that counters this.

gt94sss2

eskbanker wrote: »

I'm still unconvinced about the existence of any 'primary beneficiary' test (where is this sourced from?) and so perceive all three of your examples to be outside of s75 coverage.

There are some situations where it seems purchases by additional cardholders can be covered by Section 75

Perhaps not definitive but according to Barclaycard:

What doesn’t Section 75 cover?

Items you buy with a debit card, charge card or prepaid card
Purchases made through third parties – Paypal and Amazon Marketplace, for example – might not be covered, however these third parties may have their own refund schemes
Delivery charges aren’t included when assessing the value of your item, but you may be able to claim them along with the cost of the item
Purchases made by additional cardholders, however purchases made on behalf of the main cardholder may be covered
If you choose not to use a service when it’s available – for example, not taking a flight you’ve paid for
Loans
Balance transfers
Cash withdrawals

Terry_Towelling

Have tried to locate the resource I used before that included the 'primary beneficiary test'. I had thought it was in the examples at the end of the CCA legislation but it isn't. I can't face any more searching at the moment.

All I have found so far is the following from Which? (admittedly not a legal article) relating to purchases made by additional c/hs:-

"If, however, the purchase is made with the primary card holder's authority and if they expressly request the purchase and will benefit from it - a family holiday, for instance - they will still be covered under Section 75."

This would appear to fit with my third scenario - although in my wording I have not stated that the purchase had to be made 'at the express request of' the main c/h. It would also seem to hint at a 'beneficiary test' of sorts but falls short of requiring the main c/h to be the 'primary beneficiary'.

It would also let OP know that booking a surprise holiday where the main cardholder was a beneficiary would not be covered because it was not made at the express request of said main cardholder.

chattychappy

I stick to my interpretation - this "beneficiary" stuff is a complete red herring. It just comes down to the legal person who contracts for the goods/services has to be the account holder. S75 makes no reference to "beneficiaries".

TT, I'm sure you're familiar with it, but for others who may not have looked it up: (square brackets are mine)

S75(1):
If the debtor under a debtor-creditor-supplier agreement [*1] falling within section 12(b) or (c)[*2] has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

*1 = a 3-way agreement ("the chain") between merchant/cardholder/lender when you buy something. Courts appear to have entertained the "insertion" of intermediaries between lender and merchant. I think the use of "financed by" gives them some wriggle room here.

*2 = essentially it's something performed under a consumer credit agreement

Terry_Towelling wrote: »

"If, however, the purchase is made with the primary card holder's authority and if they expressly request the purchase and will benefit from it - a family holiday, for instance - they will still be covered under Section 75."

In an attempt to be helpful, I feel Which? have ended up being waffly. Afterall, some additional cardholders might argue that ALL their transactions are with the "authority" (or at least permission) of the main cardholder. "expressly request" - I suppose they are attempting to make the additional cardholder an agent for the main cardholder in the transaction. "will benefit from" - on the basis of agency, this is superfluous. Or are they trying to say that there must be "consideration" (in the legal sense) flowing from the merchant to the main cardholder to ensure there is a contract? But then that's always the case anyway.

Think it simply comes down to who is on the contract being the same as the cardholder in order not to break "the chain". Which? are making it more complicated than it is, in an effort to simplify!

Some years ago there was an attempt by Trading Standards (??) to argue that all additional cardholder transactions were covered. They argued that in using the card, the additional cardholder was acting as an agent for the main cardholder. The court (??) ruled that this wasn't the true picture. The additional cardholder was contracting in their own right for goods/services.

I'm afraid I don't really trust people like Which? unless they point to the relevant legal authorities. I've even seen cases where "consumer" sites point to a recent ruling and when you read the judgment it says something completely different and it's obvious the journalist misunderstood it.

Terry_Towelling

Yep, not going to argue with you but there is just too much that seems to have been untested in law. The fact that some of us feel there are uncertainties that need to be tested/clarified might suggest the act is not as clear as it could be on purchases made by credit card. Also the fact that stuff hasn't been tested/challenged only benefits the card companies who can hide behind their own interpretations. I believe consumers deserve to have a full clarification of liabilities to prevent their CC companies from wriggling out of their probable obligations.

The quote from Which?, whatever you may feel about them and however worthy (or otherwise) their endeavours may be, actually suggested that the secondary c/h's purchase had to be made with the authority of the main c/h (take your point on that) AND if the main c/h requested the purchase AND if the main c/h was to benefit - rather than each individual condition being applicable on its own.

chattychappy

Terry_Towelling wrote: »

The quote from Which? ... actually suggested that the secondary c/h's purchase had to be made with the authority of the main c/h (take your point on that) AND if the main c/h requested the purchase AND if the main c/h was to benefit - rather than each individual condition being applicable on its own.

Yes, that's the way I read it too. I think we know that a purchase by the main cardholder can be covered if paid for by the additional cardholder. Seems they are stretching that to cover a situation where the additional cardholder makes the purchase on behalf of the main cardholder (ie as an agent) rather than for themselves.

Not really sure this needs much clarification from the courts. But certainly the "intermediary" thing needs to be sorted - eg when people pay by credit card via the likes of Paypal. The courts seem to be pro-consumer in this area and this comes up much more often that additional cardholder issues.

I might be cynical, but I suspect that CCs sometimes pay off cardholders during disputes precisely to avoid escalation to a body that might make a precedent setting ruling. They would rather keep the law the way it is rather than allow it to be "developed" by the courts/FOS.

Terry_Towelling

chattychappy wrote: »

I might be cynical, but I suspect that CCs sometimes pay off cardholders during disputes precisely to avoid escalation to a body that might make a precedent setting ruling. They would rather keep the law the way it is rather than allow it to be "developed" by the courts/FOS.

You may indeed be cynical but I can confirm that when I worked for a card company that was indeed true. It is sometimes better for the card companies to accept a certain level of 'liability' (without prejudice, of course) than to start kicking back and end up facing a far higher level of losses as a result of a court making a ruling that explodes the situation even more.

To my mind that illustrates perfectly why we need more clarification - to stop CC companies from playing games. It also suggests that the legal teams within the CC companies are either not entirely sure what their liabilities are or are all too aware that such liabilities are much further reaching than they would like.

(Edit) Of course a court ruling could go too far in favour of a CC company and cut down our options as consumers.