Can chargebacks or Section 75s affect your credit rating negatively?

Just that really. If I issue either for a credit card or valid debit card, is there any scenario it can lower my credit rating? Is the worst case that you just don't get the money back?
Thanks. 

Comments

  • It's possible a lender might factor in any s75 claims you make against them into how they view you in terms of profitability and effort to manage. But it would probably need to be a repeated activity. 
  • DocQuincy
    DocQuincy Posts: 244 Forumite
    First Anniversary Name Dropper First Post
    edited 17 August 2023 at 3:24PM
    Thanks. So they do get recorded in your history? Are chargebacks recorded too?
    I've never done either before but I have received extremely poor service for something that cost a lot. Not even sure if that's covered but I feel cheated. 
    I can only do S75 as it's over £100 but curious about chargebacks too.
    EDIT: I see I can do a chargeback actually. 
  • la531983
    la531983 Posts: 1,846 Forumite
    First Post Name Dropper
    edited 17 August 2023 at 3:54PM
    DocQuincy said:
    Thanks. So they do get recorded in your history? Are chargebacks recorded too?

    Neither are by the credit reference agencies, you have missed the point.

    Let's say you have a debit card with Barclays and then decide to annoy them by doing loads of chargebacks and/or S75 claims. 

    Two years down the line you decide to apply for a Barclays loan. Banks keep them OWN data on customers as well as using the credit reference agencies in order to make decisions.
    For example, anyone who goes bankrupt owing American Express money can not hold an  American Express product ever again, regardless if the bankruptcy or debt has fallen off their six year credit record, as Amex hold their own data and keep their own blacklist. 

    One legitimate chargeback/S75 isnt going to annoy any bank. Multiple ones: maybe, as said above. But if you apply for a (for example) Natwest card, they arent going to have any knowledge of your Barclays chargeback/S75 history.
  • DocQuincy
    DocQuincy Posts: 244 Forumite
    First Anniversary Name Dropper First Post
    Thanks, so it's only recorded internally. It won't affect me then.
  • born_again
    born_again Posts: 14,335 Forumite
    First Anniversary First Post Name Dropper
    No.
    Banks do not report these, although they are logged on banks systems (so staff know what is happening with your account). Neither has a negative effect. Unless you are found to be abusing the system.

    Credit rating has nothing to do with banks. it's a figure made up by CRA's
    Life in the slow lane
  • DocQuincy
    DocQuincy Posts: 244 Forumite
    First Anniversary Name Dropper First Post
    Great, thanks. 
  • MrFrugalFever
    MrFrugalFever Posts: 1,231 Forumite
    First Anniversary First Post Photogenic Name Dropper
    la531983 said:
    DocQuincy said:
    Thanks. So they do get recorded in your history? Are chargebacks recorded too?

    Neither are by the credit reference agencies, you have missed the point.

    Let's say you have a debit card with Barclays and then decide to annoy them by doing loads of chargebacks and/or S75 claims. 

    Two years down the line you decide to apply for a Barclays loan. Banks keep them OWN data on customers as well as using the credit reference agencies in order to make decisions.
    For example, anyone who goes bankrupt owing American Express money can not hold an  American Express product ever again, regardless if the bankruptcy or debt has fallen off their six year credit record, as Amex hold their own data and keep their own blacklist

    One legitimate chargeback/S75 isnt going to annoy any bank. Multiple ones: maybe, as said above. But if you apply for a (for example) Natwest card, they arent going to have any knowledge of your Barclays chargeback/S75 history.
    I’d be interested to see any supporting evidence of this claim.
    Save £5k in 2024 challenge #32
    Saved Total = £1,560.26 / £5,000

    Secured/Unsecured loans x 0
    Credit Cards x 6 (total limit £24,250)
    Creation FS Retail Account x 1
    0% Overdraft x 1 (£250)
    Mortgage x £140,250
    Debt = £549.00 (0%APR due 22nd July 2024)

    Charity fundraising goal for 2024 = £1,000 for animal rehoming / dog fostering etc
  • kaMelo
    kaMelo Posts: 2,362 Forumite
    First Anniversary First Post Name Dropper
    edited 20 August 2023 at 9:07PM
    There is some evidence that lenders report "Q" markers when disputes such as a S75 claim is made, these may affect the made up "credit score" that Experian give you (not sure about the other CRA's) but shouldn't be viewed as a negative by any other lender. 
    https://forums.moneysavingexpert.com/discussion/6289004/section-75-causing-negative-repayment-status/p1
    Seems relevant also.  (thanks to @p3ncilsharpener)
    https://www.financial-ombudsman.org.uk/decision/DRN-2821691.pdf

    Of course repeated use of chargebacks/S75 may affect how a current lender views you as a customer.
Meet your Ambassadors

Categories

  • All Categories
  • 343K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.1K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards