Section 75 claim

chattychappy

Terry_Towelling wrote: »

The odd thing in all this is that issuers must have legal departments to advise them how to handle these situations and it seems that some of them are just not very good.

I think that's a bit like saying that drivers who break the speed limit don't appear to know the highway code. In fact they make a judgement - they think it's safe to go faster, it suits them to arrive earlier, they think they won't get caught or if they do, the fine will be acceptable.

I can't speak for CCs, but in other areas of financial services it's all about compliance risk rather than total adherence. Regulators seem soft on CCs that have systemic issues (notable exceptions include PPI). Despite S75, a CC can have a policy of telling cardholders that they must exhaust remedies with a merchant first. A complaint to the FOS might yield a victory for the cardholder concerned, but it doesn't provoke any fines or further investigation - so CCs don't have anything to lose. In fact I'm sure in some situations they make offers to cardholders to avoid an investigation that might reveal systemic problems.

For a long time CCs drafted into their materials/T+Cs statements to the effect that they don't take liabilty for fraud where the cardholder is grossly negligent despite the fact the 1974 Act has always limited liability to £50. They were doing this long after an FOS ruling on the matter - not that a ruling was really needed.

And (in a different context) I myself have drafted T+Cs that I know probably wouldn't get past a judge. You do it because you hope that the other party won't know that. Certainly this forum is full of people who will blurt out "you signed it, so you agreed to it, nothing you can do" without realising that just because something is in the T+Cs doesn't mean it's binding.

Personally I would like "misrepresentation of the law" treated more seriously in the context of consumer finance - whether it's in materials or blurted out by call centres.