Section 75 and car trade-in

UnknownWorrier

Section 75 of the Consumer Credit Act protects purchases, where a credit card is used, for an item that costs between £100 and £30,000.  A purchase over that limits is not covered - at all.
Does anyone know if Sections 75 provides protection if, say, you pay £23,000 and trade in your old car for £12,000 - giving a total value of £35,000? 
I assume there would be no protection.  But there must be thousands of similar transactions, with many buyers thinking they are safe because they used a credit card in part or wholly for such a purchase.

grumbler

Generally you don't need to pay full £23K by a CC. Any amount will suffice and most dealers won't take big CC payments anyway.
However, it's the  item that has to be below £30K.

DullGreyGuy

UnknownWorrier said:

Section 75 of the Consumer Credit Act protects purchases, where a credit card is used, for an item that costs between £100 and £30,000.  A purchase over that limits is not covered - at all.
Does anyone know if Sections 75 provides protection if, say, you pay £23,000 and trade in your old car for £12,000 - giving a total value of £35,000? 
I assume there would be no protection.  But there must be thousands of similar transactions, with many buyers thinking they are safe because they used a credit card in part or wholly for such a purchase.

£35k > £30k so no S75

If you were to get dealership arranged finance then you'd get S75a protection which covers purchases up to £60,260

born_again

It is the total value of the item that counts, not how any payments are split up.

So only option is as @DullGreyGuy

~Brock~

DullGreyGuy said:

UnknownWorrier said:

Section 75 of the Consumer Credit Act protects purchases, where a credit card is used, for an item that costs between £100 and £30,000.  A purchase over that limits is not covered - at all.
Does anyone know if Sections 75 provides protection if, say, you pay £23,000 and trade in your old car for £12,000 - giving a total value of £35,000? 
I assume there would be no protection.  But there must be thousands of similar transactions, with many buyers thinking they are safe because they used a credit card in part or wholly for such a purchase.

£35k > £30k so no S75

If you were to get dealership arranged finance then you'd get S75a protection which covers purchases up to £60,260

Just to clarify, Section 75 does not give protection for dealer finance agreements which are hire purchase based (this includes PCP agreements).  

This is because a HP agreement does not fall under the meaning of a debtor-creditor supplier agreement as defined under Section 12(b) & (c) because, under a HP agreement, the creditor and the supplier are regarded as the same person.

There is protection provided, but from the Supply of Goods (Implied Terms) Act 1973.  In other words, the borrower can pursue the lender directly using the Consumer Rights Act 2015.

DullGreyGuy

~Brock~ said:

DullGreyGuy said:

UnknownWorrier said:

Section 75 of the Consumer Credit Act protects purchases, where a credit card is used, for an item that costs between £100 and £30,000.  A purchase over that limits is not covered - at all.
Does anyone know if Sections 75 provides protection if, say, you pay £23,000 and trade in your old car for £12,000 - giving a total value of £35,000? 
I assume there would be no protection.  But there must be thousands of similar transactions, with many buyers thinking they are safe because they used a credit card in part or wholly for such a purchase.

£35k > £30k so no S75

If you were to get dealership arranged finance then you'd get S75a protection which covers purchases up to £60,260

Just to clarify, Section 75 does not give protection for dealer finance agreements which are hire purchase based (this includes PCP agreements).  

This is because a HP agreement does not fall under the meaning of a debtor-creditor supplier agreement as defined under Section 12(b) & (c) because, under a HP agreement, the creditor and the supplier are regarded as the same person.

There is protection provided, but from the Supply of Goods (Implied Terms) Act 1973.  In other words, the borrower can pursue the lender directly using the Consumer Rights Act 2015.

We are however talking about S75A - not saying that changes the outcome for HP but would have made more sense to talk about the same section rather than the section we've all agreed on doesn't apply anyway because of the value of the vehicle. 

If the creditor and supplier are the same entity then by basic logic there is no S75/S75a cover because all the sections do is mirror the liability of the supplier to the creditor. You cannot mirror what is already their liability. Because they are a creditor they almost certainly will fall under the jurisdiction of the Financial Ombudsman and so complaints can still be escalated to them as the creditor even if you wouldn't normally be able to for the supplier of a vehicle.  

~Brock~

S75A is just providing further provisions of S75 and neither apply to HP.  My comment was simply to (in a polite way) clarify the point to avoid someone mistakenly thinking that dealer finance gave S75 protection when it does not.

Absolutely, the FOS route is definitely still open, but that must commence with a complaint to the lender which would need to be centered around a breach of the CRA2015 and not S75.

DullGreyGuy

~Brock~ said:

S75A is just providing further provisions of S75 and neither apply to HP.  My comment was simply to (in a polite way) clarify the point to avoid someone mistakenly thinking that dealer finance gave S75 protection when it does not.

Absolutely, the FOS route is definitely still open, but that must commence with a complaint to the lender which would need to be centered around a breach of the CRA2015 and not S75.

S75 gives you a claim agains the finance provider, under a HP situation your claim is against the finance provider. So you are technically right but it's a bit of a moot point given you still have a claim against the finance company. 

FOS is not as prescriptive as to wanting to know if your complaint is under the CRA, CCR or other legislation, its a service intended to be used by a lay person who isn't expected to have read all consumer protection legislation cover to cover. Indeed the FOS often points out in S75 related claims that its not even bound by law to come with the same decision that a court of law would be as their remit is explicitly about fairness not strict application of the law; eg:

In considering a complaint about a financial services provider, I’m not determining the outcome of a claim that a party might have under S75. Rather, in deciding what’s a fair way to resolve Mrs B’s complaint, I’ve taken S75 into account. But that doesn’t mean I’m obliged to reach the same outcome as, for example, a court might reach if Mrs B pursued a claim for misrepresentation and or breach of contract. This service is not a court but an alternative to the courts.

https://www.financial-ombudsman.org.uk/decision/DRN-4199135.pdf

~Brock~

There are subtle differences in that a complaint under the CRA2015 would be the same as if you were complaining to the actual seller if it had been a cash transaction, and this Act gives a degree of protection to the seller (e.g. to be able to make a deduction for vehicle usage in the event of a refund).

However, I'm not looking to argue about something we both seem to agree on.  Like I said, I was just offering correction to a post that was factually incorrect.