Section 75 loophole, savy, or Plain Fraud

f.castle

@Grumpy_chap if only some people were as constructive as clear as you. Thank you for reading the point

powerful_Rogue

f.castle said:

@Grumpy_chap if only some people were as constructive as clear as you. Thank you for reading the point

But that's not the point you were trying to make.

If I bought the item again, and made the same complaint, I think I would be succesful.  The retailer would likely not ask for the item back, and I would get the money back.

I might want to sell the item, or donate it.

Is this a loophole? This does not mean it is not illegal, but ethically has issues. I do not know it is strong enough to be defined as Fraud.

ArbitraryRandom

Grumpy_chap said:

All the discussion as to whether or not the proposed course of action is fraud, or theft, or whatever seems to be missing the point.

As per Powerful Rogue... I'd suggest it's you that is missing the point - the reason for the discussion of fraud is BECAUSE the OP explicitly asked if such behaviour would be a loophole or fraudulent, not 'could they buy the item again to see if it's been updated'

After all, in your scenario the OP doesn't get to keep both the item and the money and therefore there is no loophole to be exploited  

the_lunatic_is_in_my_head

ArbitraryRandom said:

Yes, but the OP would be representing themselves as a customer making a genuine consumer purchase - when in fact they were not... they would be a customer making a purchase with an intent to benefit by acquiring both the item and their money back.  

A "representation" means any representation as to fact or law, including a representation as to the state of mind of the person making the representation... A representation may be express or implied (Section 2 (4)). It can be stated in words or communicated by conduct. There is no limitation on the way in which the representation may be expressed...A representation can be made by omission...

https://www.cps.gov.uk/legal-guidance/fraud-act-2006

I read that too but don't really understand what it means.

If it means the state of mind on it's own can be classed untrue or misleading (i.e false) by that argument couldn't, for example, buying something that is mispriced with the knowledge that it's mispriced in hope of making a gain (by paying less than the going rate) be fraud? 

Grumpy_chap said:

This is not something that should get to the position of Chargeback or S75 given there are simpler consumer rights to follow.

Just to be pedantic, a S75 claim is a consumer rights claim, just one against the credit provider rather than the trader.   

ArbitraryRandom

the_lunatic_is_in_my_head said:

ArbitraryRandom said:

Yes, but the OP would be representing themselves as a customer making a genuine consumer purchase - when in fact they were not... they would be a customer making a purchase with an intent to benefit by acquiring both the item and their money back.  

A "representation" means any representation as to fact or law, including a representation as to the state of mind of the person making the representation... A representation may be express or implied (Section 2 (4)). It can be stated in words or communicated by conduct. There is no limitation on the way in which the representation may be expressed...A representation can be made by omission...

https://www.cps.gov.uk/legal-guidance/fraud-act-2006

I read that too but don't really understand what it means.

If it means the state of mind on it's own can be classed untrue or misleading (i.e false) by that argument couldn't, for example, buying something that is mispriced with the knowledge that it's mispriced in hope of making a gain (by paying less than the going rate) be fraud? 

I think that's where the tests come in (would a reasonable person think it fraudulent) - and likely that considers the scale of the activity - plus the distinction between something being fraudulent reaching the threshold for criminality (these are CPS guidelines to inform prosecution) vs the lower threshold for civil action (and that these things are always ultimately subject to a court making a ruling). 

To explain my current thinking, we already know that where there's an obvious pricing mistake, a contract can be voided (goods required to be returned or paid for even if dispatched at listed price) - I've aways read that to be on the basis that the customer was (or is deemed they should have been) aware it was a mistake and that they sought to take advantage... i.e. you are intentionally exploiting a pricing error and taking advantage of the mistake with the intention of making a profit, which would seem to include the element of dishonestly required for fraud, so unlike a simple/not obvious mistake justice requires the buyer not profit from the contract being honoured. 

When it comes to 'criminality', it's unlikely a customer would be able to take sufficient advantage of such a mistake without the sales numbers flagging something in the system, but there have been cases (that I recall... please don't ask me for sources ) of an employee tipping off friends and co-workers then being successfully disciplined for it (which would be in the fraud act as abuse of position). 

So I'd say yes it's fraud, but not at the level anyone would go to jail for - the earlier warning that the seller or card provider might cancel/block the individual from using the services if they flagged repeated abuse of the system is more likely. 

Grumpy_chap

ArbitraryRandom said:

Grumpy_chap said:

All the discussion as to whether or not the proposed course of action is fraud, or theft, or whatever seems to be missing the point.

As per Powerful Rogue... I'd suggest it's you that is missing the point - the reason for the discussion of fraud is BECAUSE the OP explicitly asked if such behaviour would be a loophole or fraudulent, not 'could they buy the item again to see if it's been updated'

After all, in your scenario the OP doesn't get to keep both the item and the money and therefore there is no loophole to be exploited  

Yes, but I did also say

Grumpy_chap said:

Whether that benefit of the doubt is appropriate may be another conversation given the OP has suggested at the outset that they see this as a loophole with potential to be exploited.

The postulation about how this would more sensibly progress would only hold true where the individual is not creating a scenario that gives rise to the loophole that the OP proposes to exploit.
Given, normal process would avoid that loophole being created, does rather lend to the evidence of fraud or intended fraud.

the_lunatic_is_in_my_head said:

Grumpy_chap said:

This is not something that should get to the position of Chargeback or S75 given there are simpler consumer rights to follow.

Just to be pedantic, a S75 claim is a consumer rights claim, just one against the credit provider rather than the trader.   

Return under 14 days "change of mind" seems far simpler than S75 so is a "simpler consumer right".
The whole scenario proposed by the OP is one that fails to use simple solutions.

ArbitraryRandom

I have been known to come out with a remarkable sentence or two when asked on the spot to rationalise something, but I take my hat off (or I would if I were wearing one) to this masterful construction  

The postulation about how this would more sensibly progress would only hold true where the individual is not creating a scenario that gives rise to the loophole that the OP proposes to exploit.
Given, normal process would avoid that loophole being created, does rather lend to the evidence of fraud or intended fraud.

the_lunatic_is_in_my_head

Grumpy_chap said:

the_lunatic_is_in_my_head said:

Grumpy_chap said:

This is not something that should get to the position of Chargeback or S75 given there are simpler consumer rights to follow.

Just to be pedantic, a S75 claim is a consumer rights claim, just one against the credit provider rather than the trader.   

Return under 14 days "change of mind" seems far simpler than S75 so is a "simpler consumer right".
The whole scenario proposed by the OP is one that fails to use simple solutions.

But that requires the consumer to pay the return postage and suffer a reduced refund for diminished value (both subject to information requirements).

The consumer is in a far better position to exercise rights under the CRA where the goods do not conform.

Now you could argue for traders who don't give the correct info the consumer is in a better position and indeed that may be true but that comes with the headache of dealing with a trader who doesn't know what they are doing, which ultimately leads you back to S75 being easier (as change of mind is also consumer rights and covered under S75). 

I think generally most traders accept when things are broken, misdescribed, etc they need to sort it but with change of mind it's a bit more wild west as a lot of places don't know the regs, or hope the customers don't. 

I would say, unless the trader agrees to what is right without a fuss, it is far easier to do S75 as the bank is regulated and has the money to pay a court claim (which they won't defend out of principle even if in the wrong like some small businesses might do) and as this thread highlights sometimes the bank won't ask for the goods back*.

Granted if you got a knacked treadmill than the bank leaving it with you might be a real pain but if you ordered a gold watch and got a silver one the bank not wanting it back is obviously better for the consumer than a retailer who would more likely insist upon a return.

@born_again might give some insight into this, I assume if you buy say a £20k watch and are refunded under S75 there must be some value to the bank asking for the watch to be given to them? 

In short I agree go to the retailer first but any resistance to what is entitled to and S75 is easier IMHO if it applies  

*Granted we don't know if this was S75 or a chargeback and a chargeback could leave the consumer facing a claim from the retailer. 

born_again

Is down to the bank really.
I know some customers have sent stuff back, but the issue is then what to do with it.
One thing that a overhaul of S75 could look at. As in reality if a customer is getting paid out (such as this case) should they be keeping the item, as clearly they are not happy with it 🤷‍♀️

ArbitraryRandom

I wonder (again @born_again maybe able to clarify) if with sufficiently high value items the card issuer might take action against the seller? 

Do banks take out insurance for such things or do they self insure (covering expected losses via charges on transactions)?