Chargeback,Section 75 Question

Sandtree

born_again said:

Sevennotemode said:

Just one final question on this.

Assuming I win the small claims case and the cc company eventually credit me with the £1,000,do they then try and recover this from the merchant?  Or do they  suffer the loss themselves ?

Out of banks pocket. It is not cost effective to recover funds from retailer. legal expenses far outweigh any return.

Going off track and I dont dispute the answer and I am sure someone much brighter than I have come to that conclusion but I am surprised that its the answer. 

Obviously my world is insurance and we constantly pursue third parties for fairly modest debts and its clearly financially viable for us. I dont know the types of volumes of S75 claims that are made per year but even if it were to small to keep a handful of recovery technicians busy there are plenty of outsources who do recovery work in exchange for 25% of what they recover so effectively no win no fee

Feels like there is more of a legal hurdle than cost... insurance is clear that the insurer gets subrogated by settling the insured claim, maybe the waters are more muddy in banking/S75

eskbanker

Sandtree said:

Feels like there is more of a legal hurdle than cost... insurance is clear that the insurer gets subrogated by settling the insured claim, maybe the waters are more muddy in banking/S75

Yes, that would be my understanding - when a debtor is pursuing a creditor under CCA s75, the basis of the action is that this is as an alternative to pursuing to the supplier, given that both are equally liable, but a creditor choosing to accept that liability doesn't inherently introduce a debt for the supplier, and further legal action would be needed to enforce such recovery.

born_again

@Sandtree
I don't know if you will remember the breast implants that either leaked or burst years ago. I know one bank that paid out millions on S75 claims. 
They stood the loss. While they could have sued the co involved. It was deemed that the cost to do so, would be far more than they would ever get back. Despite the company still trading.