Section 75, Square payment processor. - claim won

Mc228

Thank you very much for your response Terry, that is indeed very encouraging. I shall not count my chickens just yet but it is at least nice to see some potential for a positive resolution.

The three month dealer warranty is a right that a consumer cannot even sign away. Any additional warranty provided is extra to this warranty and does not impede on this right. The third party warranty provided was a company called Warrantydirect. It was this third party warranty that have ruled it was a pre-existing defect, after their own investigation (they cited an internal breakdown of the injectors over time). My belief is that the vehicle as sold was not "fit for purpose" and it is the dealers duty to ensure that the vehicle is "of satisfactory quality". Clearly a vehicle that requires an engine + turbo + injector replacement days after purchase, does not meet this criteria.

I did try to argue the point that it was missed by the servicing BMW garage to try and elicit a good will contribution to the repair, but this was unsuccessful. They claim that the service carried out was to change the oil + filter only and that any other defects would not have been noticed (despite noticing the leaking shock?). I did try to point out that to the investigating garage, there was a strong smell of fuel in the oil and that this should have been noticed when the servicing garage changed the oil. But this has not gotten me any further with BMW. Despite the fact as well, that problems with these injectors have been noted. BMW USA actually issued an extended warranty for these injectors, to 10 years and 120,000 miles (neither of which my vehicle is). But they just say USA laws have no bearing here, which is fair enough. However, it does make me feel like it sets a precedent for the reasonable expectation of this parts life especially as it is a non-service item. It is frankly ridiculous that a breakdown of this part can wipe out an engine and both the turbos. But I feel like I am getting nowhere with BMW.

When paying I requested to pay £100 via credit card so that I would be protected under section 75. He informed me that there would be a 2.5% charge on this so I agreed to pay £102.50. I paid this value using his chip and pin reader that was provided by Square. The rest was paid via bank transfer (the £2.50 was an additional charge on top of the purchase price).

I did pay £100 as a deposit but he said I needed to cover the 2.5% fee so we made it £102.50. The bank transfer carried no additional charge.

There are a couple replacement engines available on ebay for around 3k with similar age and mileage. I would be happy to have one of those fitted as long as some issues are taken care of during installation (just replacing some gaskets while the engine is out). But we will see.

The car in question is a 335i. It has the N54 engine which is an inline 6 with a twin turbo setup. Just after my car was manufactured, the engines were switched to a single, twin scroll turbo among some other changes with the N55 model designation (which cost several thousand pounds more than the N54 in the used market as they were also facelifted). What makes mine rarer is the fact that it is the N54 with a dual clutch transmission and a coupe body shape. The dual clutch transmission was only introduced in 2009 for the coupe. It also has the individual audio system which is a super rare option, in fact I had been looking for around 8 months prior to purchase whilst saving up and this was the only one I had seen with that option.

I have confirmed with citizens advice anyway that the dealer at this point has a legal duty to either:
Attempt a repair of the vehicle + cover my losses.
Provide me with a full refund + losses.

Though I am obliged to provide him with one opportunity to repair the vehicle, before claiming a refund. If the repair is not of an adequate standard, I can then exercise my final right to reject the car and demand a full refund. By not communicating with me he is shirking these responsibilities.
I just feel at this point my best course of action is the section 75 because it is the simplest way I can see of setting myself right. I will consider bringing court action as well but for now I will see what cc say.

Again I really appreciate your opinions, so thank you very much for chiming in.

gt94sss2

He informed me that there would be a 2.5% charge on this so I agreed to pay £102.50. I paid this value using his chip and pin reader that was provided by Square. The rest was paid via bank transfer (the £2.50 was an additional charge on top of the purchase price).

A firm passing on their charges in this manner to personal customers has been against the Law since Jan 2018.

You might want to raise this with Trading Standards.

As you say, I wouldn't rule out considering a small claims court claim against both the dealer and CC firm - they are jointly liable under S.75 - if you don't get this resolved otherwise.

I presume you have seen pages such as https://www.moneyadviceservice.org.uk/en/articles/your-rights-if-something-is-wrong-with-your-car

Terry_Towelling

Are you talking with the BMW dealership or with BMW itself? It may be true that USA laws have no bearing here but that is missing the point spectacularly - it's not really anything to do with the law, it's about a known weakness of a particular part and BMW seeming to either refuse to accept the weakness exists or wilfully ignoring it.

Anyway, it is important to remember that what I am saying to you is just opinion and I hope that you get the result you need - either from the garage, BMW or your card company.

Good luck.

eco_warrior

I dealt with a recent S75 claim made via Square. It was rejected on the grounds it wasn’t chip and pin. My colleague advised me that had it been chip and pin it would have ticked that particular box to allow be considered. Seems the payment goes directly to the retailer than way so the DCS chain remained intact.

Can’t speak for all banks though and of course each case is judged on its own merits

Mc228

I have read that thank you. I believe all the laws fall on my side with this. The trading standards is another interesting angle so thank you.

I complained to BMW UK. They told me to complain to the after sales centre that has my car, as only they can escalate to BMW UK to petition for good will. They did but the BMW UK overlords refused to assist me because " age of car + third party warranty". Complained to BMW UK customer services who simply referred me back to after sales centre who claim they can do no more as BMW UK have already made a decision. Short of dumping the car outside of Bmws hq and making a scene, i dont know what else to do here. I have to organise moving the car on a flat bed away from them soon too... yet more time and expense.

That's very interesting eco_warrior. Thank you so much for the insight. I did pay using chip and pin at the retailers premises so hopefully that will go in my favour.

I appreciate all of the responses, thank you. I will keep you all posted. Hopefully this discussion will be able to help someone else in the future.

MEM62

Any update OP?

Takmon

Mc228 wrote: »

Regardless of all this, the dealer still is required to provide me with a 3 month warranty as per the consumer rights act 2015.

Where did you get that from because that isn't correct?.

A car purchase is the same as any other purchase and basically within 30 days you have the right to reject for a full refund, within 6 months they have to prove it's not faulty and after that up to six years you have to prove it is faulty. The age of the car will be taken into account.

But there is no 3 month warranty required by law so hopefully you haven't said this to them and made them think you don't know what your talking about!.

Mc228

Hmm it seems you are correct. I must have read some misinformation somewhere. Regardless, I have not hinged my case on this or mentioned it beyond the fact that it clearly says on my receipt of purchase, that I have a 3 month comprehensive warranty underwritten by the dealer.

Mc228

As to where things are currently:

They have just sent me a letter stating essentially, that they believe they are not liable as the debtor-creditor-supplier chain doesn't exist due to the third party processor. They say "Arguably, the transaction has been financed by Square and your card was used to purchase credit on a square account".

I have now drafted a letter that I am sending that says: (i have changed some information and left out the last part).

Dear Sirs,

Thank you for your letter dated the 1st of July 2019 from credit card company.

I understand your confusion surrounding the law when it comes to dealing with claims under Section 75 of the Consumer Credit Act 1974, and I hope to clarify some points for you.

When I made a payment for my car to the car dealer (dealer) using my credit card company Bank credit card, I paid in the dealership office using a card app provided by the dealership. At no time did I set up an account with square to pay my account to forward the money on to the dealer, this was done entirely through the dealers account – and this shows on my credit card statement.

In order for the Debtor – Creditor – Supplier relationship to remain unbroken, there needs to be a chain between myself, credit card company and the Supplier – this chain is unbroken as Square was only the provider of the technology to facilitate the transfer of money from my credit card to the dealership.

There are a number of decisions from the Financial ombudsman that support this position including the following quote taken from case DRN0797157 (attached for your reference):

“Because of the way card payments operate, there’s usually other parties involved in
processing the card payment who aren’t the creditor and aren’t party to the underlying
contract for goods or services. Their activities won’t generally interfere with the debtor-creditor- supplier agreement. For example:

The supplier will usually be signed up with a merchant acquirer who’ll deal with
payment processing. There are a number of companies providing merchant acquiring
services. W undertakes this role for some suppliers. Their involvement creates a
four-party agreement, and the courts have said this doesn’t affect the debtor-creditor-supplier chain.

There’ll probably also be someone providing facilities to allow the supplier to take
card payments. That might be through a payment terminal, or if online, what’s known
as a payment gateway. One of the companies that do this includes W as well as
others. They provide the technology to ensure the transaction is processed
efficiently. They don’t possess the money – although they will get paid for their
services by the supplier. This processing may add to the number of parties involved –
by now maybe five or even six – but there’s no evidence it affects the debtor-creditor-supplier chain.”

Since there is a clear chain supporting the link between myself – credit card company – dealer, and since credit card company Bank is Joint and Severally liable for rectifying the issues with the car for the reasons previously given, I now give you the following options:
_____________________________________________________________________


Etc etc.

I will keep you all posted.

eco_warrior

Yeah keep us updated on this one