Kitchen deposit on credit card, are we covered?

kitchen_woes

We ordered a new kitchen from a local company. The total price is 45k and they wanted a 15k deposit which we part paid by credit card.

They want the remainder, so full payment upfront, 4 weeks before delivery/installation of the kitchen. 

Can anyone tell me please… Are we protected under Section 75a if they go bust in the 4 weeks between receiving our money and actually delivering the kitchen? I can’t seem to find a straight answer anywhere. 

the_lunatic_is_in_my_head

Hello OP

I think the credit card company will view "the kitchen" as one item leaving it over £30k and outside the scope of S75.

I think on the last thread we had on this topic someone said the ombudsman's decisions on this leave some ambiguity, if my memory is faulty someone will correct me quick enough  

@born_again is the resident expert on this S75. 

Why do you feel the company may go bust OP? Have you checked the details on Companies House?

15k is a massive deposit and IMHO wanting the full 45k before delivery is insane, I'd be inclined to suggest payment on delivery.

It's always hard to know what to do with these things, do you risk another £30k by playing ball or risk £15k by souring the deal? 

born_again

Sadly not.
75A is when the purchase is related to the loan. Not where a CC is used

You would still have chargeback rights is they went bust.

Section 75A

Where the purchase was between £30,000 and £62,260 and you used what is called a “linked credit agreement” to fund the purchase but the supplier of the goods or services has not performed the contract or refunded your money when asked or gone bust you could claim against the finance company.  Common linked credit agreements are found when you have new kitchens/bathrooms or wardrobes fitted.  The kitchen company for example would sell the debt (your purchase price) to the credit company and at the same time you enter into a credit agreement with that company.  I have done one of these myself for fitted wardrobes and it was far from clear who I needed to complain to.  The wardrobe company had their money so had little incentive to put things right.  The credit company had no knowledge or input into the wardrobe fitting so seemed happy to sit in their ivory tower and ignore me.  I managed to get some money back from the wardrobe company but had to threaten legal action.

Another common area whether section 75A might be relevant is for new car purchases which are often on finance offered and arranged through the car dealership or other significant purchases such as solar panels, kitchen, bedroom or other home improvements.

the_lunatic_is_in_my_head

Thanks born_again.  

OP worth noting the chargeback rights (I assume) apply to the £15k and would apply to the £30k if you pay that extra £30k by card also.

A chargeback is different to S75 in the it won't cover anything you pay by others means so if you paid the £30k by bank transfer a chargeback doesn't cover that bank transfer payment (where as S75 generally speaking would I believe, if it we were under the overall 30k limit for the "item"). 

DullGreyGuy

kitchen_woes said:

Can anyone tell me please… Are we protected under Section 75a if they go bust in the 4 weeks between receiving our money and actually delivering the kitchen? I can’t seem to find a straight answer anywhere. 

No, 75a doesn't cover credit cards only finance arranged by the supplier for you. 

You would have the ability to do a chargeback though if you paid the remaining £30,000 on a debit or credit card too.

kitchen_woes

Thanks everyone for the advice.

Some very concerning information has come to light about the both the company and the salesman we have been dealing with since we paid the deposit, and we are not happy to proceed with full payment upfront unless we have some protection. 

So am I right in thinking if we pay the remaining 30k by debit/credit card (we’d probably have to spread the payments across both) we could do a chargeback if the company doesn’t turn up 4 weeks later on the date agreed for delivery and installation? 

born_again

the_lunatic_is_in_my_head said:

Thanks born_again.  

OP worth noting the chargeback rights (I assume) apply to the £15k and would apply to the £30k if you pay that extra £30k by card also.

A chargeback is different to S75 in the it won't cover anything you pay by others means so if you paid the £30k by bank transfer a chargeback doesn't cover that bank transfer payment (where as S75 generally speaking would I believe, if it we were under the overall 30k limit for the "item"). 

Thanks.
Yep chargeback would only cover card payments.

So Op could pay the £30K on a debit card for the same chargeback protection.

Bank payment, is just like giving cash, so no comeback.

Aylesbury_Duck

kitchen_woes said:

Thanks everyone for the advice.

Some very concerning information has come to light about the both the company and the salesman we have been dealing with since we paid the deposit, and we are not happy to proceed with full payment upfront unless we have some protection. 

So am I right in thinking if we pay the remaining 30k by debit/credit card (we’d probably have to spread the payments across both) we could do a chargeback if the company doesn’t turn up 4 weeks later on the date agreed for delivery and installation? 

Walk away now, if you can do so without loss.  Heading into a £45k project for arguably the most important and most used room of your house, when you have very concerning information about the company, would be crazy.

born_again

Aylesbury_Duck said:

kitchen_woes said:

Thanks everyone for the advice.

Some very concerning information has come to light about the both the company and the salesman we have been dealing with since we paid the deposit, and we are not happy to proceed with full payment upfront unless we have some protection. 

So am I right in thinking if we pay the remaining 30k by debit/credit card (we’d probably have to spread the payments across both) we could do a chargeback if the company doesn’t turn up 4 weeks later on the date agreed for delivery and installation? 

Walk away now, if you can do so without loss.  Heading into a £45k project for arguably the most important and most used room of your house, when you have very concerning information about the company, would be crazy.

The only issue with this is how is the Op going to get the £15K back?
S75 will not work on hearsay. It will need solid proof & as OP is walking away. It's not a good place to be.

Aylesbury_Duck

born_again said:

Aylesbury_Duck said:

kitchen_woes said:

Thanks everyone for the advice.

Some very concerning information has come to light about the both the company and the salesman we have been dealing with since we paid the deposit, and we are not happy to proceed with full payment upfront unless we have some protection. 

So am I right in thinking if we pay the remaining 30k by debit/credit card (we’d probably have to spread the payments across both) we could do a chargeback if the company doesn’t turn up 4 weeks later on the date agreed for delivery and installation? 

Walk away now, if you can do so without loss.  Heading into a £45k project for arguably the most important and most used room of your house, when you have very concerning information about the company, would be crazy.

The only issue with this is how is the Op going to get the £15K back?
S75 will not work on hearsay. It will need solid proof & as OP is walking away. It's not a good place to be.

Indeed, that's why I asked if they could do so without loss.  I doubt it, but it's worth checking the agreement, the deposit terms and working out what, if anything, has already been ordered, is in production, etc.  Walking away a few thousand down might be preferable to putting much, much more at risk.

DullGreyGuy

For the avoidance of doubt, the chargebacks would mean one made against each card used for the amount paid on that card. So a bit of work, and in theory you could get different outcomes on each but unlikely if it's a financial failure of the company.