Charge back rejected by TSB

mystique81

Hi all

I hope you can help.
I signed up with an online personal training courses provider in January 2019. I took an unsecured loan with a finance company , paid £99.75 deposit and now paying £24 a month for 11 months with 0%APR. I used my Visa debit card (not a credit card stupidly! I don't have one). The problem is that the fitness company has gone into voluntary liquidation advising students we are unable to complete the courses. The liquidation company says they are unable to provide a refund "due to company's position".
Finance company says due to the loan being unregulated they cannot enforce the resolution from the fitness company.
I contacted Debit Disputes department of my bank (TSB), explained the situation and was hoping for a full refund under a chargeback scheme.
TSB have said : "As the finance company are making the payments directly to the merchant, they will need to take up this issue with them. We are governed by Visa regulations and in this case we have no chargeback rights as you have received the service from the finance company and this would also apply in the case of fraud."
Do i have a leg to stand on as a paying customer who has not received goods and the company has gone bust before I was able to obtain a refund from them?
Just a bit of a detail on the fitness company - they are called Fitlearn and the founders have been previously convicted of running fake online nutrition courses . They are due to be sentenced in July.

Any advice much appreciated.

Kate

boo_star

TSB are right that you don't have any rights to a chargeback in this scenario.

If the loan is truly unregulated then S75 also wouldn't apply and there's not much that can be done other than getting in line with all the other unsecured creditors.

jonnygee2

I took an unsecured loan with a finance company , paid £99.75 deposit and now paying £24 a month for 11 months with 0%APR. I used my Visa debit card (not a credit card stupidly! I don't have one)

You cannot usually use a credit card to pay for a finance product. If you could it would not be a good idea.

I contacted Debit Disputes department of my bank (TSB), explained the situation and was hoping for a full refund under a chargeback scheme.

TSB are correct. Using their card you have paid for a loan. You have been given the loan. A chargeback isn't an option here.

There's no relationship between the gym and TSB, so you are barking up the wrong alley by talking to TSB.

Now - onto this loan...

Who is the finance company? What do they mean by 'unregulated'? All loans are regulated, by law. And - if the loan paid for the gym, then you should be protected by Section 75 of the Consumer Credit act and able to get a refund.

mystique81

jonnygee2 wrote: »

Now - onto this loan...

Who is the finance company? What do they mean by 'unregulated'? All loans are regulated, by law. And - if the loan paid for the gym, then you should be protected by Section 75 of the Consumer Credit act and able to get a refund.

The finance company is called Omni Capital Retail Finance. THey are well dodgy. Google reviews say it all: https://www.google.com/search?ei=MYYKXcLgLY7zgAal4La4CA&q=omni+capital+retail+finance&oq=omni+capital&gs_l=psy-ab.1.0.35i39l2j0l8.4071201.4072423..4073630...0.0..0.119.1248.4j8......0....1..gws-wiz.......0i71j0i131j0i67.quSfkY4o1Ik#lrd=0x48766ab9cf947bc9:0x3cd6f47b72cbdceb,1,,,

They offered the loan as unregulated and stated in the agreement that it is not foceable under the section section 75 of the finance act 1974. Basically even if the company goes bust, I have to keep repayments.

Terry_Towelling

Mystique81, can I just confirm my understanding of what has happened here?

You enrolled on a fitness course. The total cost of the course was £363.75. You paid the fitness company £99.75 as a deposit using your debit card and you have financed the rest of the course with a loan of £264 from a finance company. Is that correct, or was the £99.75 your first payment to the loan company?

The fitness company has gone into liquidation so you cannot get what you paid for any more.

The question therefore is how much of the course have you actually received and how much will not now be supplied. The inference is that it is a 12-month course, so you have presumably had a few months worth of the course so far.

This is where it could get complicated. Assuming my understanding of the situation is correct, TSB does have the right to raise a Chargeback on a debit card transaction for 'services not rendered' - but only if you paid that money by card to the fitness company. The trouble is they can only chargeback the unused/unsupplied portion of services and any Chargeback cannot exceed the £99.75 paid.

What they may say is that each month of the service (if it is a 12-month service) is worth £30.31 and (if it started in January) you've already used about 5 months of it. Those 5 months would be worth £151.55. Now it might be reasonable for TSB to say your deposit payment of £99.75 would have covered the first three months of the course (plus a bit extra) and you've therefore had that and no refund of that payment is due.

Now you might argue that if you haven't had 7/12s of the course, you should be entitled to 7/12s of the debit card transaction back through a Chargeback - I wouldn't disagree but you'd have to argue that with TSB.

As for the rest of the money, if the loan was facilitated (with the finance company) by the fitness company, you may be able to claim that there were pre-existing arrangements between the finance company and the fitness company and that there is a contractual link between you (the debtor) the finance company (the creditor) and the fitness company (the supplier) - a so-called Debtor-Creditor-Supplier chain.

That means you have rights under S75 of the CCA against the finance company and I don't believe they can side-step their obligations in law by simply saying you don't have any rights. The trouble now is that you may have a tough time getting any money from them regardless of your rights in law. You might need legal advice and that isn't cheap.

IanManc

Terry_Towelling wrote: »

Mystique81, can I just confirm my understanding of what has happened here?

You enrolled on a fitness course. The total cost of the course was £363.75. You paid the fitness company £99.75 as a deposit using your debit card and you have financed the rest of the course with a loan of £264 from a finance company. Is that correct, or was the £99.75 your first payment to the loan company?

The fitness company has gone into liquidation so you cannot get what you paid for any more.

The question therefore is how much of the course have you actually received and how much will not now be supplied. The inference is that it is a 12-month course, so you have presumably had a few months worth of the course so far.

This is where it could get complicated. Assuming my understanding of the situation is correct, TSB does have the right to raise a Chargeback on a debit card transaction for 'services not rendered' - but only if you paid that money by card to the fitness company. The trouble is they can only chargeback the unused/unsupplied portion of services and any Chargeback cannot exceed the £99.75 paid.

What they may say is that each month of the service (if it is a 12-month service) is worth £30.31 and (if it started in January) you've already used about 5 months of it. Those 5 months would be worth £151.55. Now it might be reasonable for TSB to say your deposit payment of £99.75 would have covered the first three months of the course (plus a bit extra) and you've therefore had that and no refund of that payment is due.

Now you might argue that if you haven't had 7/12s of the course, you should be entitled to 7/12s of the debit card transaction back through a Chargeback - I wouldn't disagree but you'd have to argue that with TSB.

As for the rest of the money, if the loan was facilitated (with the finance company) by the fitness company, you may be able to claim that there were pre-existing arrangements between the finance company and the fitness company and that there is a contractual link between you (the debtor) the finance company (the creditor) and the fitness company (the supplier) - a so-called Debtor-Creditor-Supplier chain.

That means you have rights under S75 of the CCA against the finance company and I don't believe they can side-step their obligations in law by simply saying you don't have any rights. The trouble now is that you may have a tough time getting any money from them regardless of your rights in law. You might need legal advice and that isn't cheap.

The fitness company is in liquidation.

You cannot do a chargeback against an account which is in the control of liquidators, because secured creditors and HMRC have a priority claim on any assets in the account.

If the OP proved that he has a claim against the company which is in liquidation then he joins the list of unsecured creditors, to whom there may be a dividend of so many pence in the pound once creditors with priority have been paid.

18cc

I am not an expert in this field and the advice below may be wrong in which case perhaps someone can correct me but I think it depends how the loan was taken out

if you went to the finance company and said hey give me a loan and they said ok and they paid it into your bank account and then you used that money for the fitness course then there was absolutely no link between the finance company and the fitness company and you need to keep paying back the loan even though what you spent it on i.e. the fitness company has gone into liquidation

if on the other hand you went to the fitness company and the fitness company said you can have this course on credit and here is a finance company you can use and the finance company used the money to pay the fitness company direct then under the regulations governing credit the finance company is equally liable just as in the same way as if you had paid on credit using a credit card

Ergates

mystique81 wrote: »

They offered the loan as unregulated and stated in the agreement that it is not foceable under the section section 75 of the finance act 1974. Basically even if the company goes bust, I have to keep repayments.

They can say what they like in their agreement - doesn't mean it's legally binding. i.e. it's quite possible they're lying and the loan IS covered by S75. The general principle in UK law is that you can't sign away your rights.

Could the Citizens Advice Bureau help here? Need somone with a better understanding of what is and isn't enforceable.

eskbanker

I think I'd be inclined to agree with previous posters who've suggested that the finance company is on the hook under section 75 here.

Omni Capital Retail Finance (http://www.omnicapitalretailfinance.co.uk/) claim to be "Authorised and regulated by the Financial Conduct Authority, Firm Reference Number: 720279", and this is endorsed by the FCA register.

While there have been a number of FCA-regulated companies offering unregulated products, it looks like the key question here is whether or not this particular loan agreement is actually regulated, regardless of their attempts to assert that it isn't. They claim membership of the Finance and Leasing Association, whose code of conduct commits them to "make sure that all our services and products meet all the relevant laws and regulations which apply to consumer and mortgage credit", so that's potentially an avenue to explore further.

Seems to me that there's nothing to lose by making a s75 claim against Omni and then escalating to the ombudsman if they try to wriggle out of it....

mystique81

18cc wrote: »

if on the other hand you went to the fitness company and the fitness company said you can have this course on credit and here is a finance company you can use and the finance company used the money to pay the fitness company direct then under the regulations governing credit the finance company is equally liable just as in the same way as if you had paid on credit using a credit card

This is my case - the course was on credit where the finance company was paying fitness company and they were taking direct debit from my bank account. Credit company says due to the loan being unsecured they are unable to force a refund from fitness company. They are also saying that Financial Ombudsman won't be able to help.


This whole course, fitness company and credit company, the liquidation company is a part of a big scam. Lots of people affected. Companies house investigating, Trading standards agency investigating, it has been reported to Watchdog.
Lots of people in the same situation as me have had their money refunded in full - the service we have purchased was to obtain the certification in Level 2 and L3 which lots of us didn't.

mystique81

Terry_Towelling wrote: »

Mystique81, can I just confirm my understanding of what has happened here?

You enrolled on a fitness course. The total cost of the course was £363.75. You paid the fitness company £99.75 as a deposit using your debit card and you have financed the rest of the course with a loan of £264 from a finance company. Is that correct, or was the £99.75 your first payment to the loan company?





The question therefore is how much of the course have you actually received and how much will not now be supplied. The inference is that it is a 12-month course, so you have presumably had a few months worth of the course so far.

This is where it could get complicated. Assuming my understanding of the situation is correct, TSB does have the right to raise a Chargeback on a debit card transaction for 'services not rendered' - but only if you paid that money by card to the fitness company. The trouble is they can only chargeback the unused/unsupplied portion of services and any Chargeback cannot exceed the £99.75 paid.




What they may say is that each month of the service (if it is a 12-month service) is worth £30.31 and (if it started in January) you've already used about 5 months of it. Those 5 months would be worth £151.55. Now it might be reasonable for TSB to say your deposit payment of £99.75 would have covered the first three months of the course (plus a bit extra) and you've therefore had that and no refund of that payment is due.

Now you might argue that if you haven't had 7/12s of the course, you should be entitled to 7/12s of the debit card transaction back through a Chargeback - I wouldn't disagree but you'd have to argue that with TSB.

As for the rest of the money, if the loan was facilitated (with the finance company) by the fitness company, you may be able to claim that there were pre-existing arrangements between the finance company and the fitness company and that there is a contractual link between you (the debtor) the finance company (the creditor) and the fitness company (the supplier) - a so-called Debtor-Creditor-Supplier chain.
I am not sure about this to be honest. The agreement to provide the service is between me and the fitness company

That means you have rights under S75 of the CCA against the finance company and I don't believe they can side-step their obligations in law by simply saying you don't have any rights. The trouble now is that you may have a tough time getting any money from them regardless of your rights in law. You might need legal advice and that isn't cheap.

The total cost of the course was £399.00. I paid £99.75 deposit, then first payment was just over £25.02and from then on payments are monthly at £24.95. The fitness company has gone into liquidation so you cannot get what you paid for any more - yes this is correct.


I paid to obtain certificate for Level 2 in Fitness instructing and Level 3 Personal training. Yes I have 4 months worth of the course. We had 1 year to complete both but in May we were advised the fitness company had gone into voluntary liquidation and we had until 1 july to submit our work. Then mid June we were told that they are no longer accept any more works, so basically we didn't have an option to complete our courses.