Section 75 - can I claim if total is 30K+ but on two separate credit cards?

born_again

StarfishAndCoffee87 said:

Thank you to everyone for replying. My apologies for being unclear. The total cost of the kitchen including VAT and the fitter's costs is £42K. I completely appreciate this is a major sum of money for a kitchen. I've saved for 10 years and it was to be the dream forever kitchen, the one major luxury of the house. The deposit was for just over £11,000. Then the three further payments combined were c.£25,000 - made up of two lots of £7500 and then one of £8940. 
I appreciate all the responses - it sounds as if because the total is over £30,000, then section 75 won't work regardless of it being on two different credit cards. I applied for a new one specifically for the project, so the 2nd-4th payments were with a different lender.

Given you will have to provide invoices for the Kitchen. There is no way to hide the amount.

S75a does not apply to credit cards, as the person posting it said... It only covers finance taken out on the purchase with a finance company & covers £30,000 to £60,260 limits

eskbanker

I already posted about s75 applying to items between £100 and £30,000, so, just to be clear, my interpretation would be that a kitchen job priced in total at over £30K should qualify if it was structured and invoiced in chunks below that, e.g. parts and labour separately.

I'm happy to be corrected if someone has any authoritative guidance as to why that thinking is flawed, but my understanding is that a purchase of five £50 tickets doesn't qualify for s75 on the basis of it being the item price that counts rather than the total, so would have thought the same logic applies to the upper limit too?

In other words, where is the reference to the total value of a composite purchase in the wording of the Act?

Subsection (1) does not apply to a claim

(a) [...]

(b) so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000

Perhaps there's subsequent case law clarifying this though....

OP implies that some of the work was done, so presumably the claim isn't for all components anyway?

sheramber

Claim and see what the  merchant says.

They wiil either accept teh claim or say no.

StarfishAndCoffee87

Thanks again for the replies and advice, I really appreciate it. It's only just sunk in this week that this has actually happened, I don't have any more money to put this right so I am rather panic-stricken and probably not thinking through logical steps. I will check on companies house as suggested, and hope eskbanker's point is right and put in a claim, as the parts, appliances and labour are separate components.

MH1927

You can go on the FOS website and search for the following

FOS decision DRN6052705 seems relevant but its not exactly the most explicit decision.

DRN8661837 is interesting because the FOS accepts that separate invoices were deliberately produced to keep the contracts under £30k and that is an acceptable means to game the system (DRN1805997 is essentially the same).

It will depend on how the contract is worded.


DRN5584361 is also relevant, but remember that each FOS decision is not binding, so read the decisions to create your argument

Jenni_D

eskbanker said:

I already posted about s75 applying to items between £100 and £30,000, so, just to be clear, my interpretation would be that a kitchen job priced in total at over £30K should qualify if it was structured and invoiced in chunks below that, e.g. parts and labour separately.

I'm happy to be corrected if someone has any authoritative guidance as to why that thinking is flawed, but my understanding is that a purchase of five £50 tickets doesn't qualify for s75 on the basis of it being the item price that counts rather than the total, so would have thought the same logic applies to the upper limit too?

In other words, where is the reference to the total value of a composite purchase in the wording of the Act?

Subsection (1) does not apply to a claim

(a) [...]

(b) so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000

Perhaps there's subsequent case law clarifying this though....

OP implies that some of the work was done, so presumably the claim isn't for all components anyway?

I agree ... it's often said (when people ask) that when buying stuff via credit card for, say, £150 then S75 only applies if an item* cost is £100+ and not whether the total cost is £100+. So what applies at the lower end applies equally at the higher (£30k) end.

i.e. A pack of 4 widgets at £150 would be covered; an order for 4 off widgets at £37.50 each (£150 total) would not.

eskbanker

MH1927 said:

DRN8661837 is interesting because the FOS accepts that separate invoices were deliberately produced to keep the contracts under £30k and that is an acceptable means to game the system

I don't think the FOS is actually accepting that, as the ombudsman refers to it as speculation:

Halifax suggested the contracts were arranged this way by C to manipulate the system and give Miss A reassurance she’d be covered by section 75. We’ve not heard from C so this is speculation. But even if this was C’s intent, I don’t think it demonstrates there was only one contract.

But those are all useful case studies - it does seem clear that, despite the legislation referring to 'single item', the FOS interpretation would seem to be that this can signify an entire contract/job/package, so chances are that OP's contract (for what's likely to be a single identifiable package of work) would be regarded by FOS as a single item for s75 purposes unless there was some very careful construction....

born_again

MH1927 said:

If you had bothered to read the thread once you created yet another troll account you would have seen the OP had clarified that the total cost was £36k, possibly bringing 75a into play.

However it is extremely rare for a credit card to have the goods or services "explicitly written into the credit agreement" so its unlikely to apply even if the amount is between £30K and £60260. Therefore the amount is irrelevant because it wouldn't be an agreement covered under S75a in the first place.

So my reading and understanding of how S75 works is evidentially better than yours!

Which would only come into play if direct finance was used. Not something that payments on a CC fall under.

MH1927

Read the 2nd para after the bit you bolded

AmberDepp

eskbanker said:

ab1234567890abcdefgh said:

MH1927 said:

AmberDepp said:

MH1927 said:

Section 75a is for linked Credit Agreements. "The specific goods or provision of a specific service are explicitly specified in the credit agreement"

Its extremely rare for credit card agreements that the spending is specified in the credit agreement.

As an example, if you had purchased a car and taken dealer finance you would be covered under 75a up to £60,260.

No.

The total value is important here.

As I see it "Deposit paid of c.11K last May 2021, then three further payments of c.25K on a new credit card in Oct-Nov 2021."

Means a deposit of 11k, and 75k in total on credit cards, which is nearly £86k!.

It's not based on the value of what you put on the cards but the value of the invoice.

And I can only hope the CC Co doesn't have to swallow your exorbitant kitchen costs.

Reading comprehension not your strong point? I mean we all know it that's why your back with yet another new account to troll again!

The Italic part of my post is a quote from the legislation. The amount paid  is secondary to the fact it is not a linked credit agreement where "The specific goods or provision of a specific service are explicitly specified in the credit agreement". So even if the cost was below £60,260 (which is the limit for a 75a claim) it still wouldn't be covered.

I mean I literally gave an example of a 75a compliant agreement and even explicitly stated the max sum it would cover.

So no the total value is not important at all.

Clearly reading is not your strong point either, or understanding how S75 works.

11+(3*25) > 60260.

Is that "simple enough for you"?

No point in continuing to discuss those notional figures, when OP clarified a couple of days ago that it wasn't three separate £25Ks but three payments totalling £25K:

StarfishAndCoffee87 said:

Thank you to everyone for replying. My apologies for being unclear. The total cost of the kitchen including VAT and the fitter's costs is £42K. I completely appreciate this is a major sum of money for a kitchen. I've saved for 10 years and it was to be the dream forever kitchen, the one major luxury of the house. The deposit was for just over £11,000. Then the three further payments combined were c.£25,000 - made up of two lots of £7500 and then one of £8940. 
I appreciate all the responses - it sounds as if because the total is over £30,000, then section 75 won't work regardless of it being on two different credit cards. I applied for a new one specifically for the project, so the 2nd-4th payments were with a different lender.

No, they didn't., they clarified that it was a deposit of £11k and the further payments amounted to £25k.

The deposit was for just over £11,000. Then the three further payments combined were c.£25,000 - made up of two lots of £7500 and then one of £8940. 

The TOTAL cost was £42k, so presumably £6k in fitting costs.

Come on people, keep up.

I still find it utterly hilarious that someone dropping forty-two thousand pounds on a kitchen is coming to Money Saving Expert for advice though.