Charge back rejected by TSB

Terry_Towelling

IanManc wrote: »

You are wrong. Using chargeback will not secure repayment. Priority debtors - those that are secured and HMRC - are always paid out first and trying to using chargeback does not subvert the statutory order of the payment of the debts of an insolvent company, and the retailer's banker's don't have any "problem" whatsoever.

Chargeback is part of Visa, Mastercard and Amex's internal rules and NOT a legal requirement, and it does not trump insolvency law.

Apologies for the repeated diversion from the thread.

Sorry, IanManc but I am right about the availability of the Chargeback process even where a company has gone bust - in some respects what you say is also true but you need to fully understand the workings of the Chargeback process before you get too carried away with the process of insolvency law - please read on.

Let's say company 'A' goes bust and fails to provide any services/goods to its customers. Those customers who paid for their goods/services by Visa/MasterCard debit/credit will approach their card issuing banks for resolution.

The provisions of the Chargeback process may require the customer approach the retailer/liquidator in the first instance for repayment. Where that process fails to bring about redress, the card issuer may invoke the Chargeback process and send the debit back to the retailer's processing bank (Acquirer) and credit the cardholder's account. On the basis that the card issuer has properly adhered to the Chargeback rules, the Acquirer will have no right to Represent that Chargeback to the card issuer.

At this point neither Issuer nor Acquirer has attempted to send the charge back to the retailer/liquidator but the customer's dispute has been remedied and resolved.

What the Acquirer then does with the debt is up to them; they can wait in line for a pay-out from any proceeds of liquidation or they can write it off as a loss. Whatever they choose to do has no bearing on the fact that the Issuer can and has made a successful Chargeback of the transaction when the retailer was in liquidation/receivership/administration or whatever else.

Where customers may find issues is if the retailer was acquired by the same bank that issued the card. Indeed, there are those who say the Chargeback process is voluntary and your Issuer is not obliged to do one for you. Maybe so, but Visa/MasterCard make much of their Chargeback protection, citing it as an encouragement to use their products for making payments as opposed to any other methods and, from my own experience, I have yet to meet an Issuer-Acquirer that would refuse to process a Chargeback in an 'on-us' situation on the basis that it is likely to result in a loss to their institution, so the cardholder can 'go hang'.

So, in essence, the fact a company may not be trading makes no difference to the Chargeback process (from the cardholder's perspective) and neither does that process 'trump' insolvency law.

mystique81

eskbanker wrote: »

CCA s75 applies "under a debtor-creditor-supplier agreement falling within section 12(b) or (c)", where there is reference to "A debtor-creditor-supplier agreement is a regulated consumer credit agreement....".

Section 8 clarifies that "A consumer credit agreement is a regulated credit agreement within the meaning of this Act if it—
(a)is a regulated credit agreement for the purposes of Chapter 14A of Part 2 of the Regulated Activities Order...." but I lost the trail there, as 'Regulated Activities Order' would currently seem to mean The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 [obviously not in place in 1974] but this doesn't have a Chapter 14A! Any ideas?

Can you please point me into where exactly I can find this ? I am looking through Consumer rights act 2015 but cannot find it anywhere. Thank you

eskbanker

mystique81 wrote: »

Can you please point me into where exactly I can find this ? I am looking through Consumer rights act 2015 but cannot find it anywhere. Thank you

Section 75 rights pertain to the Consumer Credit Act 1974, not the Consumer Rights Act 2015: https://www.legislation.gov.uk/ukpga/1974/39/contents

Terry_Towelling

IanManc wrote: »

WHICH explain chargeback much more succinctly than you do, and unlike you they get it right:

"Chargeback doesn't mean there is joint liability on the card company. Claims must be addressed to the bank that provides your debit or credit card, which in turn will put in a request to the merchant's bank.

As a result, you could get your money back from the merchant's bank if the money is there to be recovered.

But, there are no guarantees your bank will be able to recover the money through chargeback, or that the trader will accept that you were justified in taking the money back."

Clearly the money has to be there to be recovered.

And of course the availability of the money is governed by the statutory order of debts which you breezily disapply in your version. It isn't there to be recovered if the priority debtors clean it out first.

I'm not going to engage with you any more on this topic, because I've already advised the OP to go to the CAB or a Law Centre and get proper advice on the specifics of the contract in question, and your repetitious amateur outpourings won't take the OP anywhere in gaining redress so it is pointless addressing them further.

Firstly point to note, I agree entirely that OP needs proper legal advice because this looks like being a S75 claim involving the finance company. My point about a possible Chargeback was based around the notion that the £99.75 debit card payment was made to the fitness company rather than to the finance company - something that still hasn't been clarified.

By all means don't engage any further with an amateur who spent 20 years engaged in the Chargeback process - both as practitioner and as party to their creation and adoption as rules within the Visa/MasterCard Schemes - rules that, in some instances, even state that where a retailer is in liquidation certain requirements of the Chargeback may be disregarded and the Chargeback may be processed immediately. How is it that I can see and understand everything you say but you are completely unwilling to open your mind and listen to anything I have said and see that it has no bearing on insolvency law?

I have read what you have written; the least you can do is read the words I have written (obviously so verbosely) and see that it fits perfectly well with insolvency law because the Chargeback process (from the card issuer's perspective) isn't a 'request' for payment from a retailer; it is the sending of a debt from one bank to another in accordance with a set of rules that permit such exchanges regardless of whether the retailer is solvent or not. Millions of pounds have been reclaimed for cardholders over the years, precisely because the retailer is insolvent and unable to fulfil their contractual obligations.

The only reason you see WHICH's explanation of Chargebacks as succinct is because it supports your view - which is wrong - and because it too is woefully inadequate as an explanation of a process which you clearly know very little about - hence why you are relying on information provided by WHICH in the first place.

I can only hope that you are not a practitioner in insolvency law who has been advising your card-paying clients they have to wait in line for a pittance of a pay-out because they have no rights to pursue a dispute with their card company. If you are, and you have been doing that, you might need very deep pockets to cope with the compensation claims when they come.

mystique81

Terry_Towelling wrote: »

Firstly point to note, I agree entirely that OP needs proper legal advice because this looks like being a S75 claim involving the finance company. My point about a possible Chargeback was based around the notion that the £99.75 debit card payment was made to the fitness company rather than to the finance company - something that still hasn't been clarified.

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the £99.75 debit card payment was made to the finance company via an online portal which is not mentioned anywhere on my loan agreement. The mention of deposit payment on the agreement says " Less deposit "£99.75".
So do you think I do have a claim under Chargeback scheme? The bank simply says : "Please note this dispute is not covered under our fraud policy and if you would like to dispute any payment it would be payment made to fitlearn not Omni capital retail finance - as you have taken out a loan with this company Omni capital retail finance you are bound to repay this loan in full and we cannot dispute this".

Ergates

mystique81 wrote: »

the £99.75 debit card payment was made to the finance company via an online portal which is not mentioned anywhere on my loan agreement. The mention of deposit payment on the agreement says " Less deposit "£99.75".
So do you think I do have a claim under Chargeback scheme? The bank simply says : "Please note this dispute is not covered under our fraud policy and if you would like to dispute any payment it would be payment made to fitlearn not Omni capital retail finance - as you have taken out a loan with this company Omni capital retail finance you are bound to repay this loan in full and we cannot dispute this".

Not with the bank no. Look into making a section75 claim against the finance company - speak to the CAB or Law Centre to advise you if needs be.

Terry_Towelling

Thanks for this information. The way you describe it is still a little confusing though. Is it the name of the finance company that appears on your bank account next to the card payment or the name of the fitness company?

If it is the name of the fitness company on your statement, the possibility of a Chargeback is not dead, but any Chargeback could not exceed the value of the debit card transaction and I suspect TSB would say you had more than £99.75 of the course. There is a case to say you lost 8 months of the course (about two-thirds of it) and so a Chargeback for two-thirds of the £99.75 should be done, but I suspect TSB would probably say no. The fact the company is insolvent is not a factor in the decision to Chargeback or not.

If it is the name of the finance company on your statement then it sounds like it was a loan repayment. That alone rules out any possibility of a Chargeback to TSB. That narrows down your options for recovering your money. All you can realistically hope for in this situation would be for the finance company to accept that you have a claim against the fitness company for breach of contract, so you have a like claim against the finance company under the terms of S75 of the CCA.

From what you have said about the finance company, it doesn't sound like they are going to accept any such liability for your claim. It has been suggested by a few contributors that you now need to take specialist advice.

So, subject to what I have said above about the retailer name on your debit card payment(s) you may wish to speak with the CAB, a Law Centre or a legal professional about the contracts you are in with the fitness centre and the finance company and hope that they agree S75 should apply. If it does, they will probably advise you to claim from the finance company alone as the fitness company is insolvent .

eco_warrior

IanManc wrote: »

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.

This part is incorrect. I suspect the rest of what you are saying is wholly accurate but a chargeback is still valid when a merchant is, or has been, liquidated. The refund that a customer receives is just a reversal of the transaction between the issuing and acquiring (or merchant) bank.

If successful this charge would normally this would be passed on to the merchant. But if they are no longer in existence or are being wound up then the merchant bank is taking the hit.

So a customer with a chargeback wouldn't be jumping a queue of creditors, which of course wouldn't be fair.

mystique81

Terry_Towelling wrote: »

Thanks for this information. The way you describe it is still a little confusing though. Is it the name of the finance company that appears on your bank account next to the card payment or the name of the fitness company?

If it is the name of the finance company on your statement then it sounds like it was a loan repayment. That alone rules out any possibility of a Chargeback to TSB. That narrows down your options for recovering your money. All you can realistically hope for in this situation would be for the finance company to accept that you have a claim against the fitness company for breach of contract, so you have a like claim against the finance company under the terms of S75 of the CCA.

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Unfortunately it is the name of the finance company on my statement. Loan company says this: " The loan must be used to finance the purchase of the goods/services specified in the PCI. Those purchases are not covered by sec on 75 of the Consumer Credit Act 1974. This means that you only have a right to sue the supplier of the goods or services, if the supplier of the
goods or services fails to carry out its obligations under its contract with you (for example if the goods are not delivered or they are not of satisfactory quality) or if the supplier has persuaded you to enter into the contract on the basis of incorrect information. We will not be
responsible in any way for the goods or services supplied to you and the Financial Ombudsman Service will not have jurisdiction to review
any complaint you may raise in relation to this agreement, or the goods or services financed by it."

I am going in circles with them - I say I am entitled , they say i am not.

eco_warrior

mystique81 wrote: »

Unfortunately it is the name of the finance company on my statement.

So that kills any chargeback then.

mystique81 wrote: »

Loan company says this: " The loan must be used to finance the purchase of the goods/services specified in the PCI. Those purchases are not covered by sec on 75 of the Consumer Credit Act 1974. This means that you only have a right to sue the supplier of the goods or services, if the supplier of the
goods or services fails to carry out its obligations under its contract with you (for example if the goods are not delivered or they are not of satisfactory quality) or if the supplier has persuaded you to enter into the contract on the basis of incorrect information. We will not be
responsible in any way for the goods or services supplied to you and the Financial Ombudsman Service will not have jurisdiction to review
any complaint you may raise in relation to this agreement, or the goods or services financed by it."

I am going in circles with them - I say I am entitled , they say i am not.

I was under the impression that finance that's attached to goods/service, such as a car (as that's more common), did afford S75 protection. You could always got to FOS and check.