Section 75 - beware the DCS chain!

wightrider

I recently bought a piece of furniture from Etsy, using my credit card.
I won't bore you with the details, but it was rubbish and I wanted to return it. The seller offered me a replacement, but that turned out to be rubbish aswell.  Then followed weeks of back and forth trying to get a refund.  Eventually I gave up and checked out chargeback, but I was too late to do that, so I made a Section 75 claim instead with my credit card provider (Natwest).  After a lot of back and forth with them they refused to refund me because I had bought it on Etsy, and not directly from the supplier.
I disagreed with their decision and complained to the Financial Ombudsman.  I have just got a reply from them (9 months after this fiasco started) saying that they agreed with Natwest, that the DCS (Debtor/Creditor/Supplier) chain had been broken because it was an Etsy purchase.  So that's it, I have lost over £400.
I think that this is a loophole in the rules that urgently needs plugging.  It should not matter where the purchase is made, if it's on your credit card you should be covered.

DullGreyGuy

wightrider said:

I think that this is a loophole in the rules that urgently needs plugging.  It should not matter where the purchase is made, if it's on your credit card you should be covered.

It's not a loophole... you have to remember that when the CCA was drafted almost no one had credit cards and almost no businesses accepted them. The law was really created for when the store sold you finance at the same time as they sold you a bed or kitchen. The law then makes sense, the lender has vetted the merchant before allowing them to sell their finance and so it then make sense why the bank is on the line too.

The world, attitudes to credit and availability of credit has changed vastly since the law was drafted. It's not a loophole that needs closing, the whole section needs totally rewriting for the modern world. Almost certainly however we'd see reduced liability to the banks... if you think about it logically, it makes absolutely no sense why Natwest should be liable for a sofa bought via a Zettle card reader, they've had no say in that merchant being given the facility to accept cards and its totally unrealistic for them to vet the hundreds of millions of business world wide that accept credit cards before allowing you to use their card with them.

Having gone to the Financial Ombudsman you've cost them far more than the £400, if it's any consolation.