Section 75 Are you covered?

RHolmes

The Corona virus has changed all of our lives but through a recent transaction I have learned something.
Section 75 of the Consumer Credit act is not what I thought it was.
I am 75 and my wife is 72 and I thought that I was fairly money smart.
I have a credit card with Nationwide and my wife has a card, on my account as well. She and I use our cards interchangeably to buy fuel, groceries and whatever other goods that we as a family unit need to purchase. It is for convenience and safety so we don't carry large amounts of cash, just like most people I suppose. My wife has not worked for over 20 years and we don't need more that one credit card in our family as our needs are fairly modest. We are not extravagant as we are on a pension.We pay the bill off every month from our joint account. So far so good?
Everything over £100.00 is protected  by Section 75 of the Consumer Credit Act 1974 right?
No.
My wife recently purchased airline ticket with Virgin Atlantic to visit our widowed daughter and her children who, during the recent crisis were on their own. The flight was cancelled and Virgin are playing hardball with refunds. No worries,  Section 75 of the Consumer Credit Act 1974 makes the banks equally liable for just this purpose. 

Unfortunately because the purchase was not for MY specific benefit, the account holder, the purchase is not covered.
What this means is that for over 20 years we have been using the cards in complete ignorance to the fact that there is a risk to some of our purchases. I knew this rule existed for purchases for a third party but never imagined that it applied to my wife.

I do not remember being advised of the risk when or before we applied for my wife's card. There must be millions of people in the UK who are in a similar position and blindly think that we are doing our best with our finances.

Nationwide have told me that if we had bought a dress for over £100.00 then that is not covered either, same rules apply. 
It was interesting that during a recent discussion with a solicitor this fact was brought up and she was unaware of it. 

I think that this fact should be more widely discussed and advertised. 

eskbanker

RHolmes said:

I have a credit card with Nationwide and my wife has a card, on my account as well. 

[...]

Unfortunately because the purchase was not for MY specific benefit, the account holder, the purchase is not covered.

[...]

I think that this fact should be more widely discussed and advertised.

Purchases made by (and solely for) a secondary cardholder have never been eligible for s75 coverage, because it's only the account holder who's legally liable for the debt (so is the only one eligible for s75).

The explanation of this has been in the MSE s75 article for as long as I can remember:

https://www.moneysavingexpert.com/shopping/section75-protect-your-purchases/#accordion-content-0919186211-0

Edit: have you followed all the guidance in the MSE coronavirus travel rights article?  Chargeback would probably have made more sense than s75, despite many believing the opposite....

bris

Sorry but this isn't news, it's a pretty well know term when using a CC.
There a small loophole that allows the protection to stay in place if you somehow manage to benefit from the purchase.

For instance if you buy your daughter a car and she uses it not only for herself but takes you to the shops, doctors etc as part of the reason you bought the car then you are covered. Airline tickets where the whole family travel can fall under this but if the holder is not travelling then it will be much harder to convince the CC that you are benefiting from it.. I suppose if you could convince the financial ombudsman that your wife was representing you as you were unfit to travel then you might actually have a case.

chanz4

Why not ask for a charge back?

Life__Goes__On

RHolmes said:

Nationwide have told me that if we had bought a dress for over £100.00 then that is not covered either, same rules apply.

I believe in that case they would be wrong, it would be covered, as a ruling like that could fall foul of the Equality Act 2010;

eddddy

bris said:

For instance if you buy your daughter a car and she uses it not only for herself but takes you to the shops, doctors etc as part of the reason you bought the car then you are covered. Airline tickets where the whole family travel can fall under this but if the holder is not travelling then it will be much harder to convince the CC that you are benefiting from it.. I suppose if you could convince the financial ombudsman that your wife was representing you as you were unfit to travel then you might actually have a case.

I think some of what you say here is based of an urban myth - it's not in the legislation. (Possibly because the MSE article is written a little clumsily.)

The key factor in the legislation is that there must be a "debtor-creditor-supplier agreement" for section 75 cover - there's nothing in the legislation about who 'benefits' from the agreement.

So let's say that Mr A is the account holder - and Mrs A is an additional card holder (but it's not a joint account).

• If Mr A buys a car with a credit card, there is an agreement between "Mr A - the CC company - the car dealer". So a "debtor-creditor-supplier agreement" exists. Mr A can give the car as a gift to his daughter if he wants - that makes no difference.

• But if Mrs A buys the car with the additional card, there is an agreement between 'Mrs A and the supplier', and a separate agreement between 'Mr A and the CC company' and a separate agreement between 'Mr A and Mrs A' . But no single "debtor-creditor-supplier agreement" exists.

However, the 'loophole' mentioned in the MSE article is that the ombudsman (but not the courts) seems to have accepted that if Mrs A buys the car using the additional card, but the car is for Mr A's use or benefit, then section 75 cover applies. (i.e.as though Mrs A was acting as an agent for Mr A, and buying the car on Mr A's behalf).

eddddy

Life__Goes__On said:

RHolmes said:
-----
Nationwide have told me that if we had bought a dress for over £100.00 then that is not covered either, same rules apply. 

------

I believe in that case they would be wrong, it would be covered, as a ruling like that could fall foul of the Equality Act 2010;

I suspect that what Nationwide said was
"if the OP's wife had bought a dress with the additional card for over £100.00 then that is not covered either, same rules apply." 

But if the the OP bought the dress with his card (and kept if for himself or gave it as a gift to his wife), he would be covered by section 75.

Life__Goes__On

eddddy said:

I suspect that what Nationwide said was

"if the OP's wife had bought a dress with the additional card for over £100.00 then that is not covered either, same rules apply." 

But if the the OP bought the dress with his card (and kept if for himself or gave it as a gift to his wife), he would be covered by section 75.

I wouldn't suspect one way or another, as it would be guesswork  I know what they should say, but that's not always the same as what they actually say.

eskbanker

eddddy said:

However, the 'loophole' mentioned in the MSE article is that the ombudsman (but not the courts) seems to have accepted that if Mrs A buys the car using the additional card, but the car is for Mr A's use or benefit, then section 75 cover applies. (i.e.as though Mrs A was acting as an agent for Mr B, and buying the car on Mr A's behalf).

Unless the three of them have a particularly open-minded arrangement, Mr A might have something to say about it if his wife was buying a car for Mr B, and his card company definitely would!

Life__Goes__On

eskbanker said:

eddddy said:

However, the 'loophole' mentioned in the MSE article is that the ombudsman (but not the courts) seems to have accepted that if Mrs A buys the car using the additional card, but the car is for Mr A's use or benefit, then section 75 cover applies. (i.e.as though Mrs A was acting as an agent for Mr B, and buying the car on Mr A's behalf).

Unless the three of them have a particularly open-minded arrangement, Mr A might have something to say about it if his wife was buying a car for Mr B, and his card company definitely would!

I wonder how the Ombudsman would handle a  case that cross-dresser claiming for a car that his wife bought for her lover

eddddy

eskbanker said:

Unless the three of them have a particularly open-minded arrangement, Mr A might have something to say about it if his wife was buying a car for Mr B, and his card company definitely would!

Ooops! 

Well, I'm impressed that you made it all the way to the last line of the last paragraph. (And I've edited the post now, so I'll deny that I ever mentioned Mr B!)