Section 75 / Chargeback Refund Issued

DK2021x

Hi all, 

Hope you’re all keeping well. 

I was wondering whether there were any experts on S75 / Chargebacks.

Initially I raised a claim to Barclaycard at the end of April 2021, I attached the evidence via their online form and off it went. 

I didn’t hear anything initially, and I called several times for an update between the end of May - end of June 2021. 

Randomly at the start of July 2021, I received a credit on my credit card account, which I subsequently managed to transfer to my bank account via online banking. I received  a letter that same week advising me that they may need to reverse the credit if they couldn’t recover the money from the merchant. 

I’ve heard no more, and it’s now been more than 4 months since the credit was issued. 

With Barclaycard, they don’t advise you whether they have classed the queried transaction as a chargeback or S75. So I’m struggling to figure out timescales. 

My main question is, at 4 months since the refund was issued, and 6 months since I initially raised the claim - how likely are they to now reverse the transition, and re-charge my credit card account. They didn’t stipulate the timeframe, and I find it hard to believe that it’s open ended. There must be a cut off as to when the returned money is definitely mine? 

Any advise would be greatly appreciated, thanks in advance.

 

eskbanker

DK2021x said:

I received  a letter that same week advising me that they may need to reverse the credit if they couldn’t recover the money from the merchant.

This signifies chargeback, as opposed to s75.

DK2021x said:

My main question is, at 4 months since the refund was issued, and 6 months since I initially raised the claim - how likely are they to now reverse the transition, and re-charge my credit card account. They didn’t stipulate the timeframe, and I find it hard to believe that it’s open ended. There must be a cut off as to when the returned money is definitely mine? 

The merchant typically has 45 days within which to dispute the chargeback, so four months would seem to suggest that this isn't going to happen.

However, there have been reports on here of chargebacks being reversed well after the expiry of that period, so it's not as cut and dried as you may think.  There is also the issue that the merchant may subsequently seek recovery directly from you outside the chargeback process, as seen with claims against Ryanair that were publicised recently.

Did the transaction qualify for both chargeback and s75?  If so, then you still have the option of pursuing via s75 if chargeback ultimately fails to deliver....

born_again

eskbanker said:

DK2021x said:

I received  a letter that same week advising me that they may need to reverse the credit if they couldn’t recover the money from the merchant.

This signifies chargeback, as opposed to s75.

DK2021x said:

My main question is, at 4 months since the refund was issued, and 6 months since I initially raised the claim - how likely are they to now reverse the transition, and re-charge my credit card account. They didn’t stipulate the timeframe, and I find it hard to believe that it’s open ended. There must be a cut off as to when the returned money is definitely mine? 

The merchant typically has 45 days within which to dispute the chargeback, so four months would seem to suggest that this isn't going to happen.

However, there have been reports on here of chargebacks being reversed well after the expiry of that period, so it's not as cut and dried as you may think.  There is also the issue that the merchant may subsequently seek recovery directly from you outside the chargeback process, as seen with claims against Ryanair that were publicised recently.

Did the transaction qualify for both chargeback and s75?  If so, then you still have the option of pursuing via s75 if chargeback ultimately fails to deliver....

Agree has to be a chargeback. Given the letter.

Most of these cases will be due to slow work at the CC end rather than a retailer rejection outside the 45 days.
Yes a retailer can reject & CC can contest this via pre arbitration, but they only have 21 days to do so.

Last year was a prime example of that with so many chargeback that staff were put on front line and very few actually were looking for rejections. So a lot slipped through until staff were back on the job.

The best way for the OP to be sure is to call Barclaycard and get someone to check the system to see the state of the dispute.

DK2021x

Thanks for your reply @eskbanker

Well, it was for goods/services - specifically education that wasn’t carried out in line with the terms and conditions. So I thought it would have been more of a S75 claim, rather than a chargeback. 

The payment (several thousand pounds) was paid in full by credit card, and via a third party payment service, Shopify - which I know can make things more difficult, further leading me to believe it’s been classed as a S75 claim. 

The letter I received from BCARD was a blanket letter that I’m sure that everyone receives when they raise a dispute. I believe I received the same / or similar letter when I raised a fraudulent transaction with them a couple of years ago, and never received a follow up letter confirming the claim was closed - which I believe should be standard practice in FS. 

The frustrating thing is that I don’t now want to contact the bank to query the outcome in case they reopen the claim and subsequently reapply the charge after bringing it to their attention. Paranoid much! 

Thanks again  

Sandtree

DK2021x said:

The payment (several thousand pounds) was paid in full by credit card, and via a third party payment service, Shopify - which I know can make things more difficult, further leading me to believe it’s been classed as a S75 claim. 

S75 is impacted by an intermediary as the Consumer Credit Act requires there to be a direct Debtor - Creditor - Supplier relationship and if this is broken by an extra party there is no liability on the bank.

Chargebacks are not direct impacted by intermediaries, though if its a shared payment intermediary like PayPal, you may find the impact of the chargeback isnt want you want (ie the money is taken from your paypal account not the merchants)

DK2021x

Just to add (as it’s just popped into my mind) when I did call in June - my case was sent to the CCA for review. 

I was under the impression that the debtor - creditor - supplier relationship needed to be intact for a chargeback, rather than a S75 claim @Sandtree ? So that the bank has a clear way of obtaining the funds back from the merchant. From my knowledge, S75 is as you say a CCA regulation, which covers more than just the usual “they cancelled my flights, and I want my money back” situation. 

DK2021x

Just to add (as it’s just popped into my mind) when I did call in June - my case was sent to the CCA for review. 

I was under the impression that the debtor - creditor - supplier relationship needed to be intact for a chargeback, rather than a S75 claim @Sandtree ? So that the bank has a clear way of obtaining the funds back from the merchant. From my knowledge, S75 is as you say a CCA regulation, which covers more than just the usual “they cancelled my flights, and I want my money back” situation. 

Sandtree

DK2021x said:

I was under the impression that the debtor - creditor - supplier relationship needed to be intact for a chargeback, rather than a S75 claim @Sandtree ? So that the bank has a clear way of obtaining the funds back from the merchant. From my knowledge, S75 is as you say a CCA regulation, which covers more than just the usual “they cancelled my flights, and I want my money back” situation. 

Its S75, the most common breakdown with S75 is because the merchant isnt the supplier (eg a travel agent) and so S75 doesnt apply if the hotel goes bust because the chain was D-C-A-S.

The money was paid to the agent and so a Chargeback can still succeed as its in the terms of the agents Merchant Account that their bank can pull out monies for a successful chargeback - its obviously not litterally your money, its more likely someone elses money who just made a purchase as many merchant accounts hold a minimum float or a number of days before funds are accessable by the vendor to cover this sort of scenario.

eskbanker

DK2021x said:

Just to add (as it’s just popped into my mind) when I did call in June - my case was sent to the CCA for review.

What does that mean in this context?  Elsewhere it refers to the Consumer Credit Act, but that doesn't make sense here....

DK2021x

What does that mean in this context?  Elsewhere it refers to the Consumer Credit Act, but that doesn't make sense here....

@eskbanker When I called to query where I was in terms of getting an outcome regarding my claim, they said that it had been referred to the CCA team to review. Then a month later, the credit was replied to my account. 

I suppose all I want to clear up is whether after four months, the credit is likely to be reversed by the bank. I know there is no telling as to whether this is defiantly going to happen. But what I’m trying to clear up is the likelihood of this happening. And whether I’ll ever hear from the bank again regarding the claim, or whether it’s closed. 

I understand all banks have had to deal with an influx of disputes over the last two years, but surely there has to be some kind of regulation in place as to how long a bank has to make up their mind, before the account holder is given a final response / deadlock letter. I can see that there are specific rules in place in regards to chargebacks, but in terms of S75 there seems to be little regulation in terms of timeframes. 

Thanks again  

Sandtree

DK2021x said:

What does that mean in this context?  Elsewhere it refers to the Consumer Credit Act, but that doesn't make sense here....

@eskbanker When I called to query where I was in terms of getting an outcome regarding my claim, they said that it had been referred to the CCA team to review. Then a month later, the credit was replied to my account. 

I suppose all I want to clear up is whether after four months, the credit is likely to be reversed by the bank. I know there is no telling as to whether this is defiantly going to happen. But what I’m trying to clear up is the likelihood of this happening. And whether I’ll ever hear from the bank again regarding the claim, or whether it’s closed. 

I understand all banks have had to deal with an influx of disputes over the last two years, but surely there has to be some kind of regulation in place as to how long a bank has to make up their mind, before the account holder is given a final response / deadlock letter. I can see that there are specific rules in place in regards to chargebacks, but in terms of S75 there seems to be little regulation in terms of timeframes. 

Have you looked at CCA Section 75? Consumer Credit Act 1974 (legislation.gov.uk)

Its 5 bullets, it says very very little but at the time of enactment it would be very rare to apply as credit cards and consumer finance was totally different in 1974.

It simply makes them jointly liable with the supplier, it doesnt really do much more than that other than carve out small transactions or very large ones. From an ombudsman perspective they will expect the general principles of Treating Customer Fairly, dealing with Vulnerable Customers etc but the only way you can put any time pressure on them is to register a complaint that its taking too long.

For a chargeback you wont hear anything else unless a defence is received and they dont uphold your dispute. That defence has to be made within 45 days but backlogs can mean its not processed until some time later.