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Section 75, Square payment processor. - claim won
Mc228
Posts: 25 Forumite
EDIT: For those that don't feel like reading the whole thread, here is the timeline. See below that for this original post.
6/6/2019: S75 claim raised with CC.
01/07/2019: CC reject claim citing a break in the DCS chain and that "Arguably, the transaction has been financed by Square, which means that your card was used to purchase the credit on a Square account, not the services".
09/07/2019: I reply with a letter citing a previous ombudsman decision (DRN0797157) that states that there is no evidence that "four or more" party agreements break the chain.
12/08/2019: Having not heard back from CC I raise a complaint with the Ombudsman as it has been over 8 weeks since the initial complaint. I state my case as follows:
My key points:
1. Section 75 applies here because the vehicle was absolutely unfit for purpose. It was not of satisfactory quality and I later found evidence of misrepresentation. There were issues that I have since found that were not mentioned in the advert or at time of purchase (leaking shock, leaking tyre, faulty battery).
2. My contract with DEALERSHIP for them to supply the third party warranty as an additional warranty was breached when they issued a chargeback on the premium.
3. I believe that CC company have presented an invalid argument to support their rejection of my claim. They appear to make the point that due to the purchase being processed through Square, the debtor-creditor-supplier chain has been broken. They further stated:
"Arguably the transaction has been financed by Square, which means that your card was used to purchase the credit on a Square account, not the services."
3a. As I have detailed in Attachment 6, In a previous ombudsman decision a court case was referenced that supports the view that a four-or-more party agreement does not affect the debtor-creditor-supplier chain. This decision was in the favour of the consumer.
3b. As for their second argument, I have since found that this same argument was presented by a Mr Hapgood QC representing several credit providers in the Supreme court. It was rejected by the judge and abandoned by the lawyer, as referenced in Paragraph 56 of the case summary referenced below.
Citation - Paragraph 56: Office of Fair Trading v Lloyds TSB Bank Plc & Ors [2006] EWCA Civ 268 (22 March 2006)
http://www.bailii.org/ew/cases/EWCA/Civ/2006/268.html
I fail to see how there can be any other argument but that my credit agreement with CC company was used to finance the purchase of the vehicle from DEALERSHIP. No account was made by, or existed between myself and Square, they simply facilitated the transfer of funds from myself to DEALERSHIP via a Square terminal. It was the credit agreement between myself and CC company made at the time of purchase, on the premises of DEALERSHIP, that provided the financial basis for the purchase of the vehicle from DEALERSHIP. Therefore, Section 75 applies.
26/09/2019: I receive a final response from the CC stating that they will not uphold my complaint, stating "In this instance, the chain has been broken as the merchant used a third party payment processor, Square."
17/10/2019: I have not been assigned an investigator by the ombudsman but I update them with the current state of affairs as well as some further points:
My previous key points already explain why I believe the chain is intact, and the claim under Section 75 is valid, but I would like to add some further supporting evidence:
4. It is clear that the use of a third party payment processor does not automatically break the DCS chain, as CC Company continue to claim. I understand in cases such as Paypal and other "E-wallets", where money is loaded into your Paypal account before going to the supplier, that the chain would be broken; this is akin to withdrawing cash from your card and paying the supplier with the cash. Square have no other function but to act as an end-to-end payment processor and facilitate the transfer of funds from my credit card to the supplier, as explained before [Point 3a, DRN0797157], this "four-or-more" party arrangement does not break the DCS link, as proven in the prior mentioned court case and FOS decision.
4a. Square themselves describe their function as the following: "Square’s hardware and services create an end-to-end payment processing system: We capture your customers’ payment information at the point of sale (no manual reconciling), work directly with credit card payment gateways to securely route those payments to the right place, and deposit the funds into your bank account in one to two business days." - [https://squareup.com/gb/guides/payment-gateway]. There is no scope here for the D/C/S chain to be broken.
5. You have found in at least 2 previous ombudsman decisions (attached) that when not funding an (presumably PayPal - as referenced "P") "E-Wallet" account, the chain is unbroken. In this case, "P" takes on a similar function to Square as an end-to-end payment processor, in that it merely facilitates the transfer of funds made available from a credit agreement, to the supplier.
- "Like the investigator, I don’t agree that the fact that O used the services of a payment terminal, or payment gateway, provided by P interferes with or affects the d/c/s chain between Miss B/Amex/O. P simply provided the technology to facilitate the transfer of the money to O, without itself entering into possession of the money." - DRN4631631
- "Like the investigator, I don’t agree that the fact that P provided payment aggregation services to Amex is sufficient to break the d/c/s relationship between Mrs W/Amex/S. The relevant point is that Mrs W didn’t use her account with P to pay S for the goods – the transaction doesn’t appear on her the statement of her account with P. So I conclude that Amex is equally liable with S under section 75 for S’s breach of contract in supplying faulty goods. It’s therefore fair and reasonable that Amex should compensate Mrs W by paying her £725, not £625 as the investigator suggested." - DRN5747043
It is clear that the fact that DEALERSHIP used the services of Square as a payment processor does not affect the D/C/S link in this "four-or-more" party arrangement.
With these points considered, I see no reason for CC company to deny my claim, especially not for the reasons they have stated. They have made no attempt to directly address the arguments I have made to them and I believe they are being unfair and unreasonable.
10/01/2020: I am assigned an FOS investigator.
05/03/2020: The investigator sends their initial view. It agrees with me, upholding my complaint and also cites that.
Square is a payment processor, as they note in the legal terms on their website:
"Square is a payment processor that allows you to accept Cards from customers for the
payment for goods and services. We are not a bank and do not accept deposits as defined
by the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Your
Square Account is not a payment account and may not be used by you to instruct payment
transactions..." (https://squareup.com/gb/en/legal/general/payment)
As such, Square processes payment transactions for companies who then don't have to set
up relationships with individual card companies themselves. I would not consider it
necessary for there to be a contractual relationship between DEALERSHIP and CC COMPANY to satisfy the
DCS relationship.
22/06/2020: After waiting ages for a reply from the CC company they finally got back after delaying several times due to Covid. They came back rejecting the initial view from the investigator. Their argument contains a lot of irrelevant information but it seems to basically be arguing that they believe Square converts the money into "electronic money". Here is what I replied to the ombudsman with, my arguments in bold:
Taking into account what CC Company have said, I feel like they are making spurious arguments without any evidence.
I myself created an account with Square for my business and accepted a payment through it. The only time I could see a reference to the money I have received in my Square account was as an "Upcoming Transfer" before being deposited into my business bank account. I could not interact with this value in any way.
CC Company have said that "we are not aware of any agreement between Square and the supplier that the funds will be transferred directly to the supplier..."
-When registering for your Square account, you agree to the payment terms in section 9 which state: "We will settle proceeds to your verified bank account..." in fact they state on their FAQs: "Please note that your Square account will not be activated to accept payments until you have linked your bank account to Square, and the bank account has been verified."
[ https://squareup.com/gb/en/legal/general/payment - Section 9 ]
CC Company have said that "we are not aware of any agreement between Square and the supplier that the supplier will honour our card..."
-When registering with Square you agree to the Legal Terms that detail in Section 23: "You will honour all valid and current cards without discrimination when properly presented by a customer for payment".
[https://squareup.com/gb/en/legal/general/payment - Section 23]
CC Company have said that "Customers seem to know that they are paying through Squareup".
-This is irrelevant and unfounded but to me it just seems like any other credit card transaction when you are presented with a card reader.
CC Company have said that "We maintain our position that Squareup converts the funds provided by us into electronic money to finance the separate transaction with the supplier."
-This seems to be the crux of the issue. As you have noted in your view, a Square account is not a payment account. Further to that, at no time do the funds fit the FCA description of electronic money. The FCA state that it is NOT considered electronic money where:
"(c) monetary value stored on specific payment instruments that can only be used in a limited way and meet one of the following conditions:
(i) allow the holder to acquire goods or services only in the issuer’s premises;
(ii) are issued by a professional issuer and allow the holder to acquire goods or services only within a limited network of service providers which have a direct commercial agreement with the issuer;
(iii) may be used only to acquire a very limited range of goods or services; or
(iv) are valid only in a single EEA State, are provided at the request of an undertaking or a public sector entity, and are regulated by a national or regional public authority for specific social or tax purposes to acquire specific goods or services from suppliers which have a commercial agreement with the issuer."
[https://www.handbook.fca.org.uk/handbook/glossary/G346.html]
The only reference to money in a suppliers' Square account is before it is transferred to the business bank account of the supplier, where it shows as an "Upcoming Transfer".
Given that the usage of your Square account is extremely limited because one cannot do or acquire anything with the figure shown; points ii and iii confirm that it cannot be considered as electronic money. The funds made available by the credit agreement at the time of purchase clearly financed the transaction for the purchase of the vehicle from the supplier
27/07/2020: The ombudsman lets me know that they have received information directly from Square about their role in the transaction and terms and conditions. They also agree that electronic money has not been purchased and that the credit agreement has financed the transaction between myself and the dealership.
17/08/2020: The ombudsman lets me know that the CC company have now at last agreed to consider the complaint under Section 75.
10/12/2020: After back and forth with the CC company gathering more data regarding my claim to ensure that the rest of S75 applies, they send me a letter with a full and final settlement offer of the cost of the vehicle + the BMW inspection.
Now it is crucial to note here: The CC Company never accepted that Square did not break the DCS chain. They instead stated that they were looking into my claim under Section 75 "Regardless of whether or not the DCS chain was broken". This is an important distinction as I guess they wanted to avoid making a precedent of this. However should you find yourself in a situation like I have I hope that my experience, research and arguments can help you.
___________________________________
ORIGINAL POST:
Hi All,
I am wondering if anyone has had any experience on claiming back money via section 75 where the retailer used a Square card reader and tablet to take payment?
I have had an issue where I bought a car (12/2009 Bmw) from a small dealer for £9000. I paid £102.50 on my credit card at the dealers premises. I put my card into his square reader and typed my pin into his screen. On my statement is *SQ Dealername. I paid the remaining balance via bank transfer to the dealers business account.
Less than a week after I bought the car, it suffered what I would later find to be, a catastrophic engine failure and as I had an external warranty with the dealer we decided to use this. I had the car inspected at a main dealer (at a cost of £1400) and they quoted £22,000 for a new engine, 2 new turbos and 6 new injectors. After about 7 weeks worth of back and forth the third party warranty has now denied the claim as they deemed it to be a pre-existing issue (wear and tear).They also notified me that the dealer, who paid for the warranty for me as agreed, issued a chargeback for the premium... leaving me liable to pay this also... So for now the car has just been sat at a BMW aftersales centre for 2 months. Soon I will have to pay the £1400 investigation and have the car moved by flat bed as obviously I am not going to pay the £22,000.
I understand at this point, I am obliged to give the supplying dealer 1 opportunity to repair the car before I reject it and I have attempted to contact him but have had no response. I understand the 3 month mandatory warranty is still intact as well, but he is obviously going to just ignore me. I would be happy with a used engine of similar age/mileage despite the fact that it will lack any service history most likely...
I have now started a claim with my credit card company, giving them the same options according to the consumer rights act of 2015, using the consumer credit act of 1974. I want the car repaired and my damages to be paid, or a full refund plus the damages.
I am a little worried that they will try to claim that the debtor-creditor-supplier link has been broken by the payment processor, Square and I am wondering if anyone else has had success with a section 75 where Square was the payment processor? I really can't afford to lose this now nearly 11k and have nothing to show for it.
I understand I can take the dealer to court but realistically where is this going to get me? I just want the car repaired, or my money out.
Thank you for any advice.
Additional points:
1) The car has a full main dealer service history (BMW).
2) It was serviced at a main dealer a few days before I purchased it.
3) After contacting the servicing main dealer to ask if they had noticed anything, they notified me that there were no error codes or anything at the time of service. They did however tell me that there was another issue (leaking shock) which was not put in the advert. I did bring it up with the dealer at the time of purchase when I did my own inspection but he said "it wasn't noticed at the MOT or Service so...". Misrepresentation?
4) What happened was that the injectors were leaking into the crankcase, the fuel diluted the oil rendering it ineffective. This caused a rod bearing to spin, pumping metal swarf through the engine, destroying the engine and both the turbos.
6/6/2019: S75 claim raised with CC.
01/07/2019: CC reject claim citing a break in the DCS chain and that "Arguably, the transaction has been financed by Square, which means that your card was used to purchase the credit on a Square account, not the services".
09/07/2019: I reply with a letter citing a previous ombudsman decision (DRN0797157) that states that there is no evidence that "four or more" party agreements break the chain.
12/08/2019: Having not heard back from CC I raise a complaint with the Ombudsman as it has been over 8 weeks since the initial complaint. I state my case as follows:
My key points:
1. Section 75 applies here because the vehicle was absolutely unfit for purpose. It was not of satisfactory quality and I later found evidence of misrepresentation. There were issues that I have since found that were not mentioned in the advert or at time of purchase (leaking shock, leaking tyre, faulty battery).
2. My contract with DEALERSHIP for them to supply the third party warranty as an additional warranty was breached when they issued a chargeback on the premium.
3. I believe that CC company have presented an invalid argument to support their rejection of my claim. They appear to make the point that due to the purchase being processed through Square, the debtor-creditor-supplier chain has been broken. They further stated:
"Arguably the transaction has been financed by Square, which means that your card was used to purchase the credit on a Square account, not the services."
3a. As I have detailed in Attachment 6, In a previous ombudsman decision a court case was referenced that supports the view that a four-or-more party agreement does not affect the debtor-creditor-supplier chain. This decision was in the favour of the consumer.
3b. As for their second argument, I have since found that this same argument was presented by a Mr Hapgood QC representing several credit providers in the Supreme court. It was rejected by the judge and abandoned by the lawyer, as referenced in Paragraph 56 of the case summary referenced below.
Citation - Paragraph 56: Office of Fair Trading v Lloyds TSB Bank Plc & Ors [2006] EWCA Civ 268 (22 March 2006)
http://www.bailii.org/ew/cases/EWCA/Civ/2006/268.html
I fail to see how there can be any other argument but that my credit agreement with CC company was used to finance the purchase of the vehicle from DEALERSHIP. No account was made by, or existed between myself and Square, they simply facilitated the transfer of funds from myself to DEALERSHIP via a Square terminal. It was the credit agreement between myself and CC company made at the time of purchase, on the premises of DEALERSHIP, that provided the financial basis for the purchase of the vehicle from DEALERSHIP. Therefore, Section 75 applies.
26/09/2019: I receive a final response from the CC stating that they will not uphold my complaint, stating "In this instance, the chain has been broken as the merchant used a third party payment processor, Square."
17/10/2019: I have not been assigned an investigator by the ombudsman but I update them with the current state of affairs as well as some further points:
My previous key points already explain why I believe the chain is intact, and the claim under Section 75 is valid, but I would like to add some further supporting evidence:
4. It is clear that the use of a third party payment processor does not automatically break the DCS chain, as CC Company continue to claim. I understand in cases such as Paypal and other "E-wallets", where money is loaded into your Paypal account before going to the supplier, that the chain would be broken; this is akin to withdrawing cash from your card and paying the supplier with the cash. Square have no other function but to act as an end-to-end payment processor and facilitate the transfer of funds from my credit card to the supplier, as explained before [Point 3a, DRN0797157], this "four-or-more" party arrangement does not break the DCS link, as proven in the prior mentioned court case and FOS decision.
4a. Square themselves describe their function as the following: "Square’s hardware and services create an end-to-end payment processing system: We capture your customers’ payment information at the point of sale (no manual reconciling), work directly with credit card payment gateways to securely route those payments to the right place, and deposit the funds into your bank account in one to two business days." - [https://squareup.com/gb/guides/payment-gateway]. There is no scope here for the D/C/S chain to be broken.
5. You have found in at least 2 previous ombudsman decisions (attached) that when not funding an (presumably PayPal - as referenced "P") "E-Wallet" account, the chain is unbroken. In this case, "P" takes on a similar function to Square as an end-to-end payment processor, in that it merely facilitates the transfer of funds made available from a credit agreement, to the supplier.
- "Like the investigator, I don’t agree that the fact that O used the services of a payment terminal, or payment gateway, provided by P interferes with or affects the d/c/s chain between Miss B/Amex/O. P simply provided the technology to facilitate the transfer of the money to O, without itself entering into possession of the money." - DRN4631631
- "Like the investigator, I don’t agree that the fact that P provided payment aggregation services to Amex is sufficient to break the d/c/s relationship between Mrs W/Amex/S. The relevant point is that Mrs W didn’t use her account with P to pay S for the goods – the transaction doesn’t appear on her the statement of her account with P. So I conclude that Amex is equally liable with S under section 75 for S’s breach of contract in supplying faulty goods. It’s therefore fair and reasonable that Amex should compensate Mrs W by paying her £725, not £625 as the investigator suggested." - DRN5747043
It is clear that the fact that DEALERSHIP used the services of Square as a payment processor does not affect the D/C/S link in this "four-or-more" party arrangement.
With these points considered, I see no reason for CC company to deny my claim, especially not for the reasons they have stated. They have made no attempt to directly address the arguments I have made to them and I believe they are being unfair and unreasonable.
10/01/2020: I am assigned an FOS investigator.
05/03/2020: The investigator sends their initial view. It agrees with me, upholding my complaint and also cites that.
Square is a payment processor, as they note in the legal terms on their website:
"Square is a payment processor that allows you to accept Cards from customers for the
payment for goods and services. We are not a bank and do not accept deposits as defined
by the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Your
Square Account is not a payment account and may not be used by you to instruct payment
transactions..." (https://squareup.com/gb/en/legal/general/payment)
As such, Square processes payment transactions for companies who then don't have to set
up relationships with individual card companies themselves. I would not consider it
necessary for there to be a contractual relationship between DEALERSHIP and CC COMPANY to satisfy the
DCS relationship.
22/06/2020: After waiting ages for a reply from the CC company they finally got back after delaying several times due to Covid. They came back rejecting the initial view from the investigator. Their argument contains a lot of irrelevant information but it seems to basically be arguing that they believe Square converts the money into "electronic money". Here is what I replied to the ombudsman with, my arguments in bold:
Taking into account what CC Company have said, I feel like they are making spurious arguments without any evidence.
I myself created an account with Square for my business and accepted a payment through it. The only time I could see a reference to the money I have received in my Square account was as an "Upcoming Transfer" before being deposited into my business bank account. I could not interact with this value in any way.
CC Company have said that "we are not aware of any agreement between Square and the supplier that the funds will be transferred directly to the supplier..."
-When registering for your Square account, you agree to the payment terms in section 9 which state: "We will settle proceeds to your verified bank account..." in fact they state on their FAQs: "Please note that your Square account will not be activated to accept payments until you have linked your bank account to Square, and the bank account has been verified."
[ https://squareup.com/gb/en/legal/general/payment - Section 9 ]
CC Company have said that "we are not aware of any agreement between Square and the supplier that the supplier will honour our card..."
-When registering with Square you agree to the Legal Terms that detail in Section 23: "You will honour all valid and current cards without discrimination when properly presented by a customer for payment".
[https://squareup.com/gb/en/legal/general/payment - Section 23]
CC Company have said that "Customers seem to know that they are paying through Squareup".
-This is irrelevant and unfounded but to me it just seems like any other credit card transaction when you are presented with a card reader.
CC Company have said that "We maintain our position that Squareup converts the funds provided by us into electronic money to finance the separate transaction with the supplier."
-This seems to be the crux of the issue. As you have noted in your view, a Square account is not a payment account. Further to that, at no time do the funds fit the FCA description of electronic money. The FCA state that it is NOT considered electronic money where:
"(c) monetary value stored on specific payment instruments that can only be used in a limited way and meet one of the following conditions:
(i) allow the holder to acquire goods or services only in the issuer’s premises;
(ii) are issued by a professional issuer and allow the holder to acquire goods or services only within a limited network of service providers which have a direct commercial agreement with the issuer;
(iii) may be used only to acquire a very limited range of goods or services; or
(iv) are valid only in a single EEA State, are provided at the request of an undertaking or a public sector entity, and are regulated by a national or regional public authority for specific social or tax purposes to acquire specific goods or services from suppliers which have a commercial agreement with the issuer."
[https://www.handbook.fca.org.uk/handbook/glossary/G346.html]
The only reference to money in a suppliers' Square account is before it is transferred to the business bank account of the supplier, where it shows as an "Upcoming Transfer".
Given that the usage of your Square account is extremely limited because one cannot do or acquire anything with the figure shown; points ii and iii confirm that it cannot be considered as electronic money. The funds made available by the credit agreement at the time of purchase clearly financed the transaction for the purchase of the vehicle from the supplier
27/07/2020: The ombudsman lets me know that they have received information directly from Square about their role in the transaction and terms and conditions. They also agree that electronic money has not been purchased and that the credit agreement has financed the transaction between myself and the dealership.
17/08/2020: The ombudsman lets me know that the CC company have now at last agreed to consider the complaint under Section 75.
10/12/2020: After back and forth with the CC company gathering more data regarding my claim to ensure that the rest of S75 applies, they send me a letter with a full and final settlement offer of the cost of the vehicle + the BMW inspection.
Now it is crucial to note here: The CC Company never accepted that Square did not break the DCS chain. They instead stated that they were looking into my claim under Section 75 "Regardless of whether or not the DCS chain was broken". This is an important distinction as I guess they wanted to avoid making a precedent of this. However should you find yourself in a situation like I have I hope that my experience, research and arguments can help you.
___________________________________
ORIGINAL POST:
Hi All,
I am wondering if anyone has had any experience on claiming back money via section 75 where the retailer used a Square card reader and tablet to take payment?
I have had an issue where I bought a car (12/2009 Bmw) from a small dealer for £9000. I paid £102.50 on my credit card at the dealers premises. I put my card into his square reader and typed my pin into his screen. On my statement is *SQ Dealername. I paid the remaining balance via bank transfer to the dealers business account.
Less than a week after I bought the car, it suffered what I would later find to be, a catastrophic engine failure and as I had an external warranty with the dealer we decided to use this. I had the car inspected at a main dealer (at a cost of £1400) and they quoted £22,000 for a new engine, 2 new turbos and 6 new injectors. After about 7 weeks worth of back and forth the third party warranty has now denied the claim as they deemed it to be a pre-existing issue (wear and tear).They also notified me that the dealer, who paid for the warranty for me as agreed, issued a chargeback for the premium... leaving me liable to pay this also... So for now the car has just been sat at a BMW aftersales centre for 2 months. Soon I will have to pay the £1400 investigation and have the car moved by flat bed as obviously I am not going to pay the £22,000.
I understand at this point, I am obliged to give the supplying dealer 1 opportunity to repair the car before I reject it and I have attempted to contact him but have had no response. I understand the 3 month mandatory warranty is still intact as well, but he is obviously going to just ignore me. I would be happy with a used engine of similar age/mileage despite the fact that it will lack any service history most likely...
I have now started a claim with my credit card company, giving them the same options according to the consumer rights act of 2015, using the consumer credit act of 1974. I want the car repaired and my damages to be paid, or a full refund plus the damages.
I am a little worried that they will try to claim that the debtor-creditor-supplier link has been broken by the payment processor, Square and I am wondering if anyone else has had success with a section 75 where Square was the payment processor? I really can't afford to lose this now nearly 11k and have nothing to show for it.
I understand I can take the dealer to court but realistically where is this going to get me? I just want the car repaired, or my money out.
Thank you for any advice.
Additional points:
1) The car has a full main dealer service history (BMW).
2) It was serviced at a main dealer a few days before I purchased it.
3) After contacting the servicing main dealer to ask if they had noticed anything, they notified me that there were no error codes or anything at the time of service. They did however tell me that there was another issue (leaking shock) which was not put in the advert. I did bring it up with the dealer at the time of purchase when I did my own inspection but he said "it wasn't noticed at the MOT or Service so...". Misrepresentation?
4) What happened was that the injectors were leaking into the crankcase, the fuel diluted the oil rendering it ineffective. This caused a rod bearing to spin, pumping metal swarf through the engine, destroying the engine and both the turbos.
1
Comments
-
What follows is just opinion.
The DCS chain being broken by a third-party processor has cropped up in a few threads of late. I believe that some issuers see the DCS chain as unbroken where you are at the dealer's premises and pay by CHIP & PIN but it would be broken if you'd made the same payment online. I have a feeling that FOS believes the DCS chain would be broken by a third-party processor regardless of the transaction environment.
I'm not entirely convinced that this angle to S75 coverage is fully understood or that it has been tested in law. My personal view (that's all it is) is that it is unreasonable for a consumer to lose S75 protection simply because a retailer chose to use a third-party processor.
I don't know whether the warranty firm's contention that the condition was pre-existing and down to wear and tear puts the dealer in breach of contract and I don't know whether their contention carries any weight anyway because they haven't actually inspected the vehicle by the sound of it. Only the BMW dealer has inspected the engine; they've diagnosed the problem but haven't said anything about its cause being down to wear and tear that should have been rectified as part of the normal maintenance schedule (unsurprising as they would be implicated for not spotting it at the service).
The leaking shock was not a misrepresentation that influenced your decision to buy (by the sound of it) because you said you noticed it at the time of buying the car.
Anyway, you may have your work cut out proving breach of contract but you might be covered by S75 despite the third-party processor. Let us know what your CC company says.0 -
I would tend to agree with this quite simply because I don't see how an average customer who pays by chip/pin in a shop (or car dealership or whatever) would actually know (or care) what payment processor the merchant was using.Terry_Towelling wrote: »My personal view (that's all it is) is that it is unreasonable for a consumer to lose S75 protection simply because a retailer chose to use a third-party processor.
On a separate note, I an confused as to how or why or how the dealership successfully 'issued' a chargeback for the warranty premium.0 -
Thank you for your replies. The third warranty company conducted their own investigation and had their own engineers assess the injectors and the engine, additionally to Bmws assessment. The result of their own investigation lead them to deny the claim as a pre existing condition.
The third party warranty was provided by the dealer and he paid for it. They then asked me if I was aware that there had been a chargeback on the premium paid, which i obviously was not.
Regardless of all this, the dealer still is required to provide me with a 3 month warranty as per the consumer rights act 2015. The third party warranty has no bearing on that. But he clearly isn't going to honour it as he is ignoring me. Breaching my statutory rights and his obligations as a dealer.
I am unsure my noticing of an issue is grounds to dismiss misrepresentation, as when queried, he straight up denied knowledge of it or that it was even a factor. No it didn't influence my final decision but it definitely brings his character into question. Especially when i learned that it was actually on the full service report that he omitted, electing to provide only the invoice portion for the oil change.
I do believe that my rights to invoke section 75 should be upheld, as one should assume when paying on the premises directly to the supplier. In my view it would be unreasonable for me to have to worry about the ins and outs of where the money goes before reaching the supplier. But i know the credit card company are most likely going to force me to go to the FOS. I am just hoping someone else here may have had some success and would be willing to comment.0 -
Since whether or not the chain has been broken by using an intermediary processor has not really been tested then the best way for you to go forward is to claim under section 75 with your credit card company and see what they say.
if they deny the claim then you get a Deadlock letter and go to the fos
if you have no luck there then what I would do is go to the small claims court and if necessary enforce any judgement against the dealer using the High Court baliffs - a fairly simple procedure. There is nothing to stop you starting the small claims court procedure in parallel with your claim under section 750 -
Thank you. It makes me feel a bit better to know that court action would be fairly simple. This is all already stressful enough as it is!
With the cc company, I will await their reply and see where they want to go. I will update you on my progress. I think at some point this third party payment processor stuff does have to get sorted out! It is a bit disheartening to go into the purchase knowing you at least have Section 75 if things go very wrong, only to find out later that you may not have the protection through no fault of your own.0 -
You say that the dealer is ignoring you. Have you been back to the showroom?0
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Hi, i should have mentioned that the dealer is about 5 hours / 250 miles away from me. I travelled to purchase the car.0
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Well for me, I wanted a certain vehicle with a specific specification. The available number of these in the country with the specific spec I wanted was very low. At the moment there are only 3 in the country on autotrader that match what I wanted and even still they are lower spec than the one I purchased. Therefore I would have to be willing to travel to find one most likely.
Yes, it has meant it is difficult for me to go visit the dealer in person but I would still expect my consumer rights to be upheld regardless of where I am in the country. I would reasonably expect with a reputable dealer, the ability to get a quote from a local garage to have the vehicle fixed for smaller issues. And even then that the third party warranty would cover larger works.0 -
Another contributor to the forum (Eco-warrior) is an employee of a credit card company (I left 15 years ago) and he has previously said his company will consider a DSC chain as unbroken where the customer paid by CHIP & PIN but a third-party processor was involved. That doesn't necessarily mean anything in law but it is encouraging for you.
The dealer issuing a Chargeback for the warranty premium could mean that they used a 'purchasing/procurement card' to pay for the warranty but then disputed the payment for some reason. It might also have nothing to do with the Chargeback process (capital 'C') but could just be some kind of motor industry term for the things they do with payments.
If the dealer is required in law to offer a 3-month warranty, then refusing to honour such a requirement is presumably not permitted but, if the contract you entered into, doesn't mention the 3-month warranty, I'm not sure how you stand on alleging breach of contract. Further to that there may be a paradox to address if the dealer says it was caused by pre-existing wear and tear and therefore not covered by the warranty; would you then be able to say that he had a duty to uncover such wear and tear before selling it to you or would he be able to say such wear and tear is inevitable in a 10 year old car and failing to spot it is not a sign of dodgy dealing or a breach of contract or of selling a vehicle not fit for purpose? How do you stand on that when the servicing BMW dealer didn't spot it either?
I would imagine, if your claim is accepted, your card company may offer you the cost of the vehicle plus the £1400 report in settlement rather than offer to source a replacement engine (unless they can do so for less). Given the rarity of the vehicle, though, sourcing a replacement engine for less than £9K is unlikely.
Would I be right in assuming you paid a £100 deposit for the car on your 'personal' credit card and the dealer charged you a £2.50 fee for using a credit card? If so, that is another breach of law by the dealer (unless he also levies a £2.50 fee for all other methods of payment).
Is the vehicle an M3? To have two turbo chargers (rather than a single twin-scroll one) and at least 6 injectors that does point to a 'V' configuration engine.0
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