Section 75 Claim Rejected - Other Options

Civvy21

Good morning,
A family member booked flights with Emirates in late 2019, for travel in October 2020. Unfortunately she made a major mistake in using a third party booking agent (Budget Air). The total value was approx £1,300. The payment was made to Budget Air using a credit card.

Needless to say the flights were cancelled due to the travel restrictions and Emirates advised that customers should apply to their booking agents for refunds or vouchers. Refunds were requested from Budget Air. Sadly they have not been helpful at all. They have made excuse after excuse and refused to refund the money. Although Emirates will not deal directly with my family member they have advised that Budget Air have access to the funds.

The bank has rejected the S75 claim due to the broken "debtor, creditor, supplier" link. I asked the bank to reconsider their decision on the basis that Budget Air have breached the terms of their contract with the claimant. Insofar that Budget Air should have claimed the money back from Emirates (as it says they will do in their terms) if indeed they ever passed it on. The bank stated they would not reconsider their decision. As a matter of course we will forward the case on to the FOS.

Can anybody advise if they think the breach of contract argument has any merit?

Also, we are still considering using the small claims process. Is it advisable to wait until the FOS have reached their decision? Also, do we included the credit card supplier in this process ie do we put a claim in against Budget Air and the bank jointly? Again, does anybody think we have a case here. 

Grateful for any advice.

[Deleted User]

Civvy21 said:

Needless to say the flights were cancelled due to the travel restrictions 

By whom?     

Civvy21

I'm assuming Emirates.
Hypothetically, if the flights had gone ahead but travel restrictions were in place does that change the picture much. Also, as I understand it Emirates offered a refund. 

[Deleted User]

Yes. If your family member cancelled the flights (ie she didn't go), then she would need to claim on her travel insurance, if it covers her.

The agent is unlikely to offer a refund for change of mind, even if Emirates do, but she needs to check her terms.

eskbanker

Civvy21 said:

I'm assuming Emirates.
Hypothetically, if the flights had gone ahead but travel restrictions were in place does that change the picture much.

Yes, if the airline cancels a flight then they'll be obliged to issue a refund as they're no longer making the paid service available for use.  If the flight went ahead but travel restrictions prevented passengers from availing themselves of the service the airline was offering, that is a different and more complex scenario.

Civvy21 said:

Refunds were requested from Budget Air. Sadly they have not been helpful at all. They have made excuse after excuse and refused to refund the money.

On what grounds are they refusing to accept liability?

Civvy21 said:

The bank has rejected the S75 claim due to the broken "debtor, creditor, supplier" link. I asked the bank to reconsider their decision on the basis that Budget Air have breached the terms of their contract with the claimant. Insofar that Budget Air should have claimed the money back from Emirates (as it says they will do in their terms) if indeed they ever passed it on. The bank stated they would not reconsider their decision. As a matter of course we will forward the case on to the FOS.

Can anybody advise if they think the breach of contract argument has any merit?

Although there would appear to be a breach of contract by Budget Air if they're reneging on a contractual obligation to refund for a cancelled flight, it's not one that you can pin on the card provider under s75, for the reason they've given.  The fact that Budget Air are a fourth party (beyond debtor/creditor/supplier) doesn't give you additional rights under s75 to choose which company to pursue, so this just leaves you with the court route.

Civvy21

Thank you all for your comments. I appreciate your advice.
Major mistake number two. Insurance was taken out two days after the flights were booked. An expensive lesson learnt.
I will further investigate whether the flight went ahead. I am working on the assumption that as Emirates offered refunds the flight was cancelled by them. 
Budget Air seem to be the major problem here. Budget Air were contacted to request a refund about a month after the flights were due to take place. They agreed to request a refund, but then spent the next few months giving one excuse after another for the delay. After about four months they advised that a refund would not be provided. With hindsight, I now know she should of gone down the chargeback route rather than S75. 
As it stands now we will go down the FOS route emphasising the "breach of contract" element. We may have a slight chance of success.
I do think we should look at the small claims route. I know it will cost about £60. Hopefully it will be worth it. 
Can anybody advise do we just claim against Budget Air, or do we jointly claim against the bank as well? As I asked earlier, do people think the "breach of contract" element has any merit?
Again, thank you all for your advice.

epm-84

Civvy21 said:

Needless to say the flights were cancelled due to the travel restrictions

I wouldn't say it is 'needless to say'. In October 2020 when I went to Manchester Airport there were just two departures showing for terminal 1 - one being an Aegean flight to Athens and the other being an Emirates flight to Dubai, that was despite Dubai being on the list of destinations that people needed to self-isolate after returning from.

I don't know if it affects your case but if you book a flight as one product and that flight is cancelled then you're entitled to a refund. If you book a package including a flight then there may be something in the T&Cs which forces you to accept an alternative on the same day, if one is available.  That actually applies with Budget Air as their T&Cs for packages states a major change for flights is where there is "a change in your departure or arrival flight by more than 12 hours"   https://s1.travix.com/budgetair/UK/buauk-conditions-en.pdf

Also note "BudgetAir.co.uk is not a member of ABTA or ATOL, however rest assured your bookings are protected. Travix International is full IATA accredited and the CAA (who governs the ATOL license) provides IATA agents, meeting their criteria, to act as an 'airline ticketing agents' which means that an ATOL license is not required. If we source a fare via an IATA credited flight consolidator, your purchase is protected under that consolidator's license. You may receive an ATOL license from them directly"

[Deleted User]

You claim will be against Budget Air, not the bank. 

If FOS don't agree that the bank are liable, then a court certainly won't.

Civvy21

Epm-84: Thanks. It was flight only. Re the IATA info, excuse my ignorance, but does this imply there may be a route here to force Budget Air to offer a refund.
Zx81: Thanks. That's interesting. I mistakingly assumed that the FOS and the small claims court would work under different parameters. The FOS would solely look at whether or not the  bank is equally liable under Section 75, whilst the court would look at a wider picture.


 

epm-84

Civvy21 said:

Epm-84: Thanks. It was flight only. Re the IATA info, excuse my ignorance, but does this imply there may be a route here to force Budget Air to offer a refund.

Not for flight only. ATOL protection protects a package holiday. Their IATA bit is basically just them trying to convince customers to book with them even though they aren't an ATOL member themselves.

The relevant bit for you is they aren't an ABTA member so you can't complain to ABTA about them.  The help and complaints page on the ABTA website says "If you have an enquiry about a company that is not a member of ABTA, please contact Citizens Advice."

eskbanker

Civvy21 said:

Major mistake number two. Insurance was taken out two days after the flights were booked. An expensive lesson learnt.

Not necessarily a mistake/lesson, unless the insurer has indicated that this invalidates a claim?  Having said that, travel insurers are very reluctant to reimburse costs that should be paid by other parties, so if the flight was cancelled then it's unlikely the insurer would stump up, but they may be able and wiling to step in if the passengers were unable to fly due to travel restrictions.

Civvy21 said:

I will further investigate whether the flight went ahead. I am working on the assumption that as Emirates offered refunds the flight was cancelled by them. 
Budget Air seem to be the major problem here. Budget Air were contacted to request a refund about a month after the flights were due to take place. They agreed to request a refund, but then spent the next few months giving one excuse after another for the delay. After about four months they advised that a refund would not be provided. With hindsight, I now know she should of gone down the chargeback route rather than S75. 
As it stands now we will go down the FOS route emphasising the "breach of contract" element. We may have a slight chance of success.
I do think we should look at the small claims route. I know it will cost about £60. Hopefully it will be worth it. 
Can anybody advise do we just claim against Budget Air, or do we jointly claim against the bank as well? As I asked earlier, do people think the "breach of contract" element has any merit?

In order to establish if there was a breach of contract by Budget Air, you need to get to the bottom of whether the paid-for service was available for use or not, i.e. whether Emirates cancelled the flight, as this will invoke different provisions within the contract.  The airline saying they'd offer a refund doesn't necessarily signify this (they can say what they like as you or your family member aren't their direct customer so there's no comeback on them).

If you can demonstrate a breach of contract by Budget Air, i.e. that they've failed to adhere to their Ts & Cs or statutory obligations, then this opens up the prospect of court action against them, but still doesn't make the card company jointly liable for any such breach.  As you say, there's a possibility that FOS could overrule the card company, but there's no obvious reason for them to do so, and their timescales are horrendous so it would be many months down the line before you were any the wiser about their stance....