Credit card company refunded under s75, now the retailer is wanting me to pay them back

ItsComingRome

Jenni_D said:

ItsComingRome said:

I'm not going to quote all that but you again seem to misunderstand what S75 does.  It gives the same rights against the bank as they have against a retailer.

The best result you can possibly get when exercising your consumer rights is a full refund.  As a chargeback gives you that, it fulfils, and in some cases will exceed your consumer rights, which satisfies the banks obligations under S75 and closes the case.

Whatever happens after that is irrelevant, the customer has had their rights upheld and a refund issued.  The bank is not, nor ever will be under current legislation, responsible for anything else under S75.

Bear in mind that if the customer is sued, and loses, they technically didn't have a valid claim under S75 anyway.

I don't know why you can't understand that.

If an S75 claim succeeds then the Credit Provider foots the bill. (Whether or not they seek to recover those monies from the retailer is their concern and nothing to do with the consumer). Also, after a successful S75 claim the goods then technically belong to the Credit Provider, not the consumer or retailer. Thus the chances of the retailer suing the consumer after an S75 claim are remote - the retailer hasn't lost anything (unless the Credit Provider successfully sues them, which again is remote - the costs of pursuing this [with no guarantee of success] will often make the action not commercially viable).

With a chargeback the consumer gets a refund very quickly but the retailer has 45 (?) days to contest the claim. As said above, Credit Providers prefer to take this approach first because it costs them nothing - the monies are extracted from the retailer's bank. This leaves the consumer open to a) having the funds snatched away again if the challenge succeeds and/or b) being sued by the retailer.

So, as has been described earlier in this thread, a successful S75 has very different outcomes for a consumer versus a chargeback.  

I never said it didn't.  But from a legal standpoint, the customer's rights have been upheld and they have their money back.  The bank's obligations under S75 are therefore satisfied. S75 does not offer anything other than being able to hold the bank equally responsible for any issues that arise.  As the bank has dealt with this in the "best" possible way (a full refund) then that's the end of it.

I appreciate the are differences between how a chargeback functions vs the bank footing the bill themselves (and when the bank is on the hook for the refund it's hardly plain sailing for the consumer) but that doesn't mean the bank hasn't fulfilled their obligations.

born_again

Sandtree said:

The OP therefore may have thought they were requesting a S75 claim but in reality were simply raising a dispute for the card company to decide how best to approach

Which is one of the problems brought about by all the sites offering information on how to get your money back on CC's. It is very rare to see any mention of chargebacks. They tend to focus on S75.
Which while it is great that consumers are getting advice on how to get their money back (in certain situations). These sites & the banks should make it clear that there are option available to consumers.
Lost count of the number of customers who do not know you can chargeback on Debit or Credit cards. They just want S75 as they have seen it on the internet.

End of the day part of the reason for high CC interest rates are to cover S75 refunds. That money has to come from somewhere🤣 

Manxman_in_exile

Jenni_D said:

ItsComingRome said:

I'm not going to quote all that but you again seem to misunderstand what S75 does.  It gives the same rights against the bank as they have against a retailer.

The best result you can possibly get when exercising your consumer rights is a full refund.  As a chargeback gives you that, it fulfils, and in some cases will exceed your consumer rights, which satisfies the banks obligations under S75 and closes the case.

Whatever happens after that is irrelevant, the customer has had their rights upheld and a refund issued.  The bank is not, nor ever will be under current legislation, responsible for anything else under S75.

Bear in mind that if the customer is sued, and loses, they technically didn't have a valid claim under S75 anyway.

I don't know why you can't understand that.

...

So, as has been described earlier in this thread, a successful S75 has very different outcomes for a consumer versus a chargeback.  

the_lunatic_is_in_my_head said:

Manxman_in_exile said:

suggests that if you just want to get this sorted out and be certain of not getting sued, then just contact the retailer and simply agree some kind of settlement with them.

... the question is are there any banking regulations that specify the card provider should issue a S75 if the customer specifically requests such. 

As, I think you pointed out, the banks reply in the screenshot avoids the question of whether it was S75 or not, the answer is known because the retailer has foot the bill but the average person isn't going to know this. Whether the OP has any right to complain about the bank's handling of the issue is a separate matter. 

The problem I have with this thread is that if I go to my bank and ask them to process a s75 refund (with no comeback on me if it's successful) then that is what I want them to do.  I don't want them instead to process a chargeback which might leave me open to being sued by the retailer even if the chargeback is successful.  As Jenni_D agrees, the two processes can have very different outcomes for the consumer, one of which might turn out badly for them.  Who wants the hassle and stress of the threat of being sued even if it comes to nothing?

I was under the impression that FSA regulated banks etc had a legal duty to treat customers fairly under the Banking Conduct of Business Sourcebook.  (Is that what it's called?   BCOBS?).

I would argue that where a bank or credit card provider has two alternative courses of action open to them, and rather than choose the statute empowered course specifically requested by a customer they instead choose the alternative which is more beneficial and profitable to the bank, but with a potentially less beneficial and more costly outcome for the customer, then the bank is obviously treating their customer unfairly.  I don't see that any further explanation of that is necessary.

I understand why the banks have done it, but that doesn't justify it,  As born_again has said, s75 CCA wasn't drafted with CCs in mind, but their use has proliferated since then and the banks obviously haven't enjoyed having to pay more and more refunds themselves.  So they've got together and made up chargebacks with their own rules.  Well that's ok but only as long as chargebacks don't deny customers access to their statutory rights and don't leave them potentially worse off than if a s75 had been processed in the first place.  (I've certainly read threads on here where people have asked for help because a chargeback has been refused for some reason relating to chargeback rules, but the bank has never told them that they could still have a valid s75 claim.  A good example would be the daft chargeback rule that you can't claim for non-delivery of something that has been delivered to the wrong address, whereas you could make a s75 claim.)  It's clearly not treating the customer fairly.

I'm making a general point here about s75 versus chargebacks and how banks appear to handle them in their favour and not the customer's favour - but it still applies in particular to this thread.  Look at the above text exchange between the OP and the bank which I think most people would interpret to mean that the refund is done and dusted and there is nothing further the retailer can do.  That might be strictly accurate as far as a chargeback goes, but I think most people would agree that it's a bit misleading by omitting to point out that the retailer may have other courses of action open to them outside chargeback - which of course the customer doesn't know about.  I think all of this is in breach of the duty to treat customers fairly and openly.

Another issue with s75 -v- chargeback (and this thread is a good example) is what happens with the goods that are the subject of the refund?  As Jenni_D points out, after a s75 claim the goods technically belong to the credit provider and they can tell the customer to return them, make them available for collection, or keep them.  But what does the bank do when a chargeback is made?  Do they just take the money away from the retailer?  Do they tell the retailer to make arrangements to have the goods returned to them?  Do they tell the customer to send the goods back or make them available for collection?  I'm assuming this thread exists because the customer has not been told what to do, hence confusion, and the retailer now threatens to sue him for return of the goods.  It's unfair and it's wrong.

Grumpy_chap

Manxman_in_exile said:

The problem I have with this thread is that if I go to my bank and ask them to process a s75 refund (with no comeback on me if it's successful) then that is what I want them to do.  I don't want them instead to process a chargeback which might leave me open to being sued by the retailer even if the chargeback is successful.  

There are some excellent points that have been made in this thread, and we are drifting away from the OP's issue and I am nervous of going too DT (but, if we are going that way, we've already arrived).

This really could be a case of needing to be careful of what we collectively wish for.

I am not entirely sure why the finance company shares joint liability with the supplier for quality in any finance case - I am sure there are good reasons it was initially linked.  However, in the case of credit cards, the potential liability to the finance company can be entirely disproportionate to the revenue that the finance company receives.  As S75 cases become more prevalent (driven by press / media 'just claim' articles), somehow the costs need to be met.

Consider the following please:

1. CC companies have limited bar to businesses being able to accept CC - particularly through services such as SumUp.
2. CC companies have very little control over how the supply business operates or manages quality.
3. CC companies only receive a low fee, typically around 2%.  Many cards are no annual fee for the user.  It is only uncleared balances that start to allow the CC to generate any meaningful revenue off the transactions.
4. I could see a 3 yo 45k mile car for £10k, pay a £100 deposit on CC over the phone and then pay the balance on debit card when I collect the car.
5. The CC had an income from that sale of around £2.
6. Then I find the car had been "clocked" so is not as described.  The Dealer cares not, so I lodge S75 claim for recovery of funds.
7. A liability of £10k against business revenue of £2 is entirely disproportionate - I can't think of any other kind of business that would carry that level of detriment for such small reward and with such little control.

Somehow the CC companies either need to be able to recoup these costs from the traders, or the risk needs to be insurable (which it may well not be) and that insurance costs would mean the 2% fee rising so everything going up in the shops, or we all find ourselves paying through some means that ends up making CC restricted (either high fees or high control on the traders that can accept CC).

When the CC company has no use for the goods being returned, then the obligation within S75 should still require the goods returned to the supplier.  This is important to prevent S75 simply being an invitation to fraud.

There are occasional tales regaled of buying a car, getting a full refund, plus compensation, plus a bunch of flowers plus keeping the car but such examples must be exceptional and do not set a helpful or sustainable precedent.

Manxman_in_exile

Grumpy_chap

I agree with a lot of those comments.  As born_again observed earlier, s75 certainly wasn't designed back in the early 70s with credit card purchases in mind to the same extent as they are used today.  It was intended to apply much more to traditional loans and other similar types of financing arrangements.  

I'm also quite happy for the current situation to be reviewed and I'd have no problem at all with the possibility of associated price rises etc so long as any rises are distributed and allocated fairly and appropriately and not dumped inequitably on a particular group of users (or even businesses).  

But until the law and associated framework relating to s75 is changed, I simply disagree with the view (not one I'm ascribing to you) that a chargeback gives exactly the same rights to a consumer as s75 does.  If a consumer can be sued by an aggrieved retailer after a chargeback then the two self-evidently are not the same as they produce different outcomes.  If a bank has a choice between processing a s75 or a chargeback, and the customer has asked for a s75 refund, then that is what the bank should do.  If the bank decides there is no valid claim and rejects it - that's fine, I have no problem*** with that.  The customer can drop it or take it to court.  But if the bank does a chargeback and the customer ends up with threats of being sued (whether the retailer has any proper grounds to sue or not) then that is wrong.  The customer shouldn't have to put up with the hassle and stress of such threats because the bank chose to pursue chargeback rather than s75.  By making that choice the bank is not treating the customer fairly.

There's also the problem that if the bank goes down the chargeback route but the aggrieved retailer doesn't sue, the retailer can still  always refuse to have future dealings with that customer unless they repay the chargeback "debt".  In the case of one-off transactions it may not be a problem, but I can see that it could be very prejudicial to consumers in many circumstances.  (I think I may have read of budget airlines having chargebacks made against them, not bothering to challenge them with the bank, but refusing to take subsequent bookings from the consumer until the chrgeback has been repaid.  That wouldn't happen with s75 as the retailer would never have paid the refund).

But none of this helps the OP...


***  I do wonder if its_coming_Rome doesn't agree with me because they are under the misapprehension that I am suggesting that banks should pay out on all s75 claims made to them irrespective of their merits?  I'm not.  I'm saying that if a customer asks their bank for a s75 refund then that is what the bank should process and not default to a chargeback.  I'm not suggesting that banks (or anyone else including retailers) should pay out on on groundless claims.  Just that banks should not leave their customers open to being sued by blindly pursuing a chargeback rather than a s75 claim

viksviks84

Sandtree said:

Its an interesting discussion on the "right" for a S75 -v- chargeback... seems I missed the fun over the weekend.

Whilst the OP says they asked them to raise a S75 claim I personally would want to kick the tyres of that a little harder on exactly what was done and how. In another case on here not that long ago the bank has a page on Chargebacks and a page on S75, both pages have the link to the same webform which is entitled "raise a dispute". The text on the form itself is mute on what type of dispute will be raised but its understandable that you could assume its one or the other depending on which page you clicked through from (I imagine there may be other routes to the form too).

The OP therefore may have thought they were requesting a S75 claim but in reality were simply raising a dispute for the card company to decide how best to approach

I had to 'raise a dispute' on my app, which I did. I looked yesterday and at no point does it clarify whether is would be raised as a chargeback or a S75, there were also no links to Ts or Cs to clarify. I did call Newday earlier and spoke to a lovely chap, who confirmed that initially they always go down the chargeback route, and only go down S75 if the changeback is objected to within the 45 days.

He did agree that the outcomes (eg, the potential to be sued by retailer) are very different and he did raise a complaint for me as the online form was not clear. I will let you know the outcome.

Edited to say that on the online form I did type in the freetext box that I wanted a S75. 

viksviks84

Manxman_in_exile said:

Jenni_D said:

ItsComingRome said:

I'm not going to quote all that but you again seem to misunderstand what S75 does.  It gives the same rights against the bank as they have against a retailer.

The best result you can possibly get when exercising your consumer rights is a full refund.  As a chargeback gives you that, it fulfils, and in some cases will exceed your consumer rights, which satisfies the banks obligations under S75 and closes the case.

Whatever happens after that is irrelevant, the customer has had their rights upheld and a refund issued.  The bank is not, nor ever will be under current legislation, responsible for anything else under S75.

Bear in mind that if the customer is sued, and loses, they technically didn't have a valid claim under S75 anyway.

I don't know why you can't understand that.

...

So, as has been described earlier in this thread, a successful S75 has very different outcomes for a consumer versus a chargeback.  

the_lunatic_is_in_my_head said:

Manxman_in_exile said:

suggests that if you just want to get this sorted out and be certain of not getting sued, then just contact the retailer and simply agree some kind of settlement with them.

... the question is are there any banking regulations that specify the card provider should issue a S75 if the customer specifically requests such. 

As, I think you pointed out, the banks reply in the screenshot avoids the question of whether it was S75 or not, the answer is known because the retailer has foot the bill but the average person isn't going to know this. Whether the OP has any right to complain about the bank's handling of the issue is a separate matter. 

The problem I have with this thread is that if I go to my bank and ask them to process a s75 refund (with no comeback on me if it's successful) then that is what I want them to do.  I don't want them instead to process a chargeback which might leave me open to being sued by the retailer even if the chargeback is successful.  As Jenni_D agrees, the two processes can have very different outcomes for the consumer, one of which might turn out badly for them.  Who wants the hassle and stress of the threat of being sued even if it comes to nothing?

I was under the impression that FSA regulated banks etc had a legal duty to treat customers fairly under the Banking Conduct of Business Sourcebook.  (Is that what it's called?   BCOBS?).

I would argue that where a bank or credit card provider has two alternative courses of action open to them, and rather than choose the statute empowered course specifically requested by a customer they instead choose the alternative which is more beneficial and profitable to the bank, but with a potentially less beneficial and more costly outcome for the customer, then the bank is obviously treating their customer unfairly.  I don't see that any further explanation of that is necessary.

I understand why the banks have done it, but that doesn't justify it,  As born_again has said, s75 CCA wasn't drafted with CCs in mind, but their use has proliferated since then and the banks obviously haven't enjoyed having to pay more and more refunds themselves.  So they've got together and made up chargebacks with their own rules.  Well that's ok but only as long as chargebacks don't deny customers access to their statutory rights and don't leave them potentially worse off than if a s75 had been processed in the first place.  (I've certainly read threads on here where people have asked for help because a chargeback has been refused for some reason relating to chargeback rules, but the bank has never told them that they could still have a valid s75 claim.  A good example would be the daft chargeback rule that you can't claim for non-delivery of something that has been delivered to the wrong address, whereas you could make a s75 claim.)  It's clearly not treating the customer fairly.

I'm making a general point here about s75 versus chargebacks and how banks appear to handle them in their favour and not the customer's favour - but it still applies in particular to this thread.  Look at the above text exchange between the OP and the bank which I think most people would interpret to mean that the refund is done and dusted and there is nothing further the retailer can do.  That might be strictly accurate as far as a chargeback goes, but I think most people would agree that it's a bit misleading by omitting to point out that the retailer may have other courses of action open to them outside chargeback - which of course the customer doesn't know about.  I think all of this is in breach of the duty to treat customers fairly and openly.

Another issue with s75 -v- chargeback (and this thread is a good example) is what happens with the goods that are the subject of the refund?  As Jenni_D points out, after a s75 claim the goods technically belong to the credit provider and they can tell the customer to return them, make them available for collection, or keep them.  But what does the bank do when a chargeback is made?  Do they just take the money away from the retailer?  Do they tell the retailer to make arrangements to have the goods returned to them?  Do they tell the customer to send the goods back or make them available for collection?  I'm assuming this thread exists because the customer has not been told what to do, hence confusion, and the retailer now threatens to sue him for return of the goods.  It's unfair and it's wrong.

I can confirm I have never been told what to do with the sofa, which is why I haven't had the council collect it yet (thank goodness!)

The sofa was delivered to me, I'm hoping the retailer will simply come to collect it, but I'm doubtful it'll be that easy! 

Sandtree

Manxman_in_exile said:
I was under the impression that FSA regulated banks etc had a legal duty to treat customers fairly under the Banking Conduct of Business Sourcebook.  (Is that what it's called?   BCOBS?).

The Food Standards Authority are not as interested in banks as they once were... the Financial Services Authority was disbanded decades ago and its duties split between the PRA (part of the Bank of England) and the FCA. The FCA now maintain the COBS and the industry specific variants 

The rules are not as granular as to say you should do a chargeback over a S75 etc and the OP has already confirmed they went online and filled in a dispute form - ie it was not explicitly a S75 request they made but assumed it was.

Manxman_in_exile said:
I'm making a general point here about s75 versus chargebacks and how banks appear to handle them in their favour and not the customer's favour - but it still applies in particular to this thread.  Look at the above text exchange between the OP and the bank which I think most people would interpret to mean that the refund is done and dusted and there is nothing further the retailer can do.  That might be strictly accurate as far as a chargeback goes, but I think most people would agree that it's a bit misleading by omitting to point out that the retailer may have other courses of action open to them outside chargeback - which of course the customer doesn't know about.  I think all of this is in breach of the duty to treat customers fairly and openly.

Another issue with s75 -v- chargeback (and this thread is a good example) is what happens with the goods that are the subject of the refund?  As Jenni_D points out, after a s75 claim the goods technically belong to the credit provider and they can tell the customer to return them, make them available for collection, or keep them.  But what does the bank do when a chargeback is made?  Do they just take the money away from the retailer?  Do they tell the retailer to make arrangements to have the goods returned to them?  Do they tell the customer to send the goods back or make them available for collection?  I'm assuming this thread exists because the customer has not been told what to do, hence confusion, and the retailer now threatens to sue him for return of the goods.  It's unfair and it's wrong.

Whilst there is a lot of focus on the negative of Chargeback -v- S75 lets not forget there are a lot of positives too...

Had it been handled as a S75 claim it'd probably still be months away from resolution, the OP will have been required to submit next to no evidence for a chargeback whereas for a S75 it is likely that the bank would have required them to pay for an independent engineers report which many people struggle with how to do so.


It is always possible that had the S75 been processed first it could have been rejected and by the time that had happened the timelimit for a Chargeback could have been passed in which case the OP has no where left to go. By doing the time limited chargeback first you can always do the less time limited S75 after if it fails.

In answer to your question, its not up to the bank what happens to the goods after a chargeback... they have as you say just reached into the merchants account and taken the funds (as allowed by the T&Cs). The retailer has to make their own mind up on if its worth trying to get the goods back, trying to get the money back etc and that is a material point of chargebacks... for a £10 bottle of wine its a hassle for a customer to go to court to get a refund but turn the tables and almost no retailer is going to waste time and effort trying to do anything about a chargeback. For larger purchases, and particularly from smaller retailers who are likely to be less "professional", then it increases the chances but still gives the hassle to the merchant.

viksviks84

These are the screenshots of the 'dispute transaction' page online, please correct me, but I see no mention of S75 or chargeback in plain English? 

Sandtree

viksviks84 said:

These are the screenshots of the 'dispute transaction' page online, please correct me, but I see no mention of S75 or chargeback in plain English? 

Many credit card companies don't... you raise a "dispute" and they will use their best judgement on what to do first which, if within the time limit and rules of the scheme, normally means a chargeback because its much quicker and less onerous for you.

That would leave the option of S75 if the chargeback is unsuccessful whereas if a S75 is done first the time limit for a chargeback has normally expired by the time the decision is made.