Section 75: can a merchant take old refund back on a new transaction

heatleader

Can anyone advise.  Previous section 75 refund claim was successful against a tour operator.  Can they potentially dock the money if paying against a future holiday, e.g. if old Section 75 refund was say £1,500 and a future holiday is say £2,000 can they take the £2,000 payment, dock £1,500 against the old refund which they disagreed with and say you've only paid £500 for the new holiday and you won't be provided until you pay the outstanding £1,500.  If so, does it make any difference if going direct to the tour operator (as the old Section 75 case was) or if the same tour operator booking via a travel agent on a future holiday as the contract would be with the t/a, or is there no potential for recourse by the tour operator on future business.

jon81uk

Section 75 is against the credit card and it’s the credit card company giving you money as they are jointly liable. 

A chargeback is when the bank recovers the transaction back from the retailer and therefore the debt may exist with the retailer as you have your money back.

Manxman_in_exile

Are you talking about s75 or a chargeback?

My understanding is that a s75 refund comes from the card provider, not the trader, so this shouldn't arise with a s75 refund.

DullGreyGuy

heatleader said:

Can anyone advise.  Previous section 75 refund claim was successful against a tour operator.  Can they potentially dock the money if paying against a future holiday, e.g. if old Section 75 refund was say £1,500 and a future holiday is say £2,000 can they take the £2,000 payment, dock £1,500 against the old refund which they disagreed with and say you've only paid £500 for the new holiday and you won't be provided until you pay the outstanding £1,500.  If so, does it make any difference if going direct to the tour operator (as the old Section 75 case was) or if the same tour operator booking via a travel agent on a future holiday as the contract would be with the t/a, or is there no potential for recourse by the tour operator on future business.

A S75 is paid from your banks own pockets and so the Merchant hasnt made a loss. 

With most banks you "raise a dispute" and its up to them if they process this as a S75 claim or a Chargeback (which the merchant does pay).  If its processed as a chargeback it comes from the merchants pocket however a bank isnt a court of law in the UK and so their decisions are only at a certain level and the merchant can look to either the courts or future contracts to recover their monies.

RyanAir did this a lot with false Covid chargebacks and then deducting the debt from future bookings the person made.

Booking via a middleman isnt full protection, contract wordings could potentially be constructed to allow offsetting but it would be more open to challenge.

The real question though is why are you considering booking with a company that you felt messed you about enough to have to involve your bank to deal with it?

eskbanker

DullGreyGuy said:

A S75 is paid from your banks own pockets and so the Merchant has made a loss. 

Missing a 'not' there?

heatleader

Yes it was section 75 (credit card) not chargeback.  Many thanks for the replies.

The other factor I wasn't sure of regarding Section 75 is I think I read somewhere it only applies to direct purchases i.e. not applicable via a third party such as a travel agent(?).  This being going forward on any future booking.

eskbanker

heatleader said:

Yes it was section 75 (credit card) not chargeback.  Many thanks for the replies.

The other factor I wasn't sure of regarding Section 75 is I think I read somewhere it only applies to direct purchases i.e. not applicable via a third party such as a travel agent(?).  This being going forward on any future booking.

Chargeback can also be used for credit card transactions.

S75 does rely on a direct debtor-creditor-supplier chain, so if you buy a tour operator's package through a travel agent, then you'd only have any s75 protection for the actions of the agent rather than anything relating to the tour operator.

DullGreyGuy

heatleader said:

The other factor I wasn't sure of regarding Section 75 is I think I read somewhere it only applies to direct purchases i.e. not applicable via a third party such as a travel agent(?).  This being going forward on any future booking.

S75 requires a 3 way relationship between Debtor (you), Creditor (your lender) and Supplier. If there is a 4th party like an agent then S75's application would be limited to just the services of that 4th party and not the end supplier. 

So yes, if you book through a travel agent and then the airline cancels a flight or such there is no S75 protection.

heatleader

DullGreyGuy said:

heatleader said:

Can anyone advise.  Previous section 75 refund claim was successful against a tour operator.  Can they potentially dock the money if paying against a future holiday, e.g. if old Section 75 refund was say £1,500 and a future holiday is say £2,000 can they take the £2,000 payment, dock £1,500 against the old refund which they disagreed with and say you've only paid £500 for the new holiday and you won't be provided until you pay the outstanding £1,500.  If so, does it make any difference if going direct to the tour operator (as the old Section 75 case was) or if the same tour operator booking via a travel agent on a future holiday as the contract would be with the t/a, or is there no potential for recourse by the tour operator on future business.

A S75 is paid from your banks own pockets and so the Merchant has made a loss. 

With most banks you "raise a dispute" and its up to them if they process this as a S75 claim or a Chargeback (which the merchant does pay).  If its processed as a chargeback it comes from the merchants pocket however a bank isnt a court of law in the UK and so their decisions are only at a certain level and the merchant can look to either the courts or future contracts to recover their monies.

RyanAir did this a lot with false Covid chargebacks and then deducting the debt from future bookings the person made.

Booking via a middleman isnt full protection, contract wordings could potentially be constructed to allow offsetting but it would be more open to challenge.

The real question though is why are you considering booking with a company that you felt messed you about enough to have to involve your bank to deal with it?

Thanks for clarifying.  As regards your question, we would only use them again as a last resort (apologies, no pun intended!).  In going through options with a travel agent she found exactly what we wanted but it was with the same tour operator, we said no thanks to the travel agent, and unfortunately not available from other tour operators.  Hence, we made other arrangements.  Unfortunately going forward the position is the same.

bris

Manxman_in_exile said:

Are you talking about s75 or a chargeback?

My understanding is that a s75 refund comes from the card provider, not the trader, so this shouldn't arise with a s75 refund.

As an ex merchant I can assure you the CC chases the merchant to recover their losses. It's done by deducting further transactions from the terminal.

CC does not pay the S75 unless the merchant goes bust.

When the CC believes there is a good case for a chargeback or S75 claim against the merchant do you really think they are taking the hit? 

Manxman_in_exile

bris said:

Manxman_in_exile said:

Are you talking about s75 or a chargeback?

My understanding is that a s75 refund comes from the card provider, not the trader, so this shouldn't arise with a s75 refund.

As an ex merchant I can assure you the CC chases the merchant to recover their losses. It's done by deducting further transactions from the terminal.

CC does not pay the S75 unless the merchant goes bust.

When the CC believes there is a good case for a chargeback or S75 claim against the merchant do you really think they are taking the hit? 

Well that's interesting.

Your experience seems counter to what several posters (some I think working in the banking industry) have said on many threads in the past that s75 refunds - as opposed to chargebacks - are not routinely recovered from the traders concerned.

The view I expressed earlier has simply been informed by what posters like @born_again have said previously.

(Indeed, I thought it was one of the main reasons why banks preferred to action chargebacks rather than s75 claims?  ie the refunds come out of the trader's funds and not the bank's)