Section 75 - mix of husband and wife's credit cards used

ro1892

I understand that if a purchase is in your name but you use a credit card in someone else name to pay (e.g. a spouse) then you are unlikely to be covered by section 75.

What about if a mixture of credit cards was used to pay, for example:
Purchaser: husband (all receipts for the item have the husband's name)
Price: £3000 - £1000 paid on husbands credit card, £2000 paid on spouses credit card

Would you likely be covered by section 75 here as you have paid over £100 on a credit card in your name?

born_again

Yes.
Depending the reason for the claim. But might also fall under chargeback.

Might need to go to both card provider through. As they will not want to payout for something they can avoid.

retiredbanker1

Just have the invoice made out in both names.

DullGreyGuy

ro1892 said:

I understand that if a purchase is in your name but you use a credit card in someone else name to pay (e.g. a spouse) then you are unlikely to be covered by section 75.

What about if a mixture of credit cards was used to pay, for example:
Purchaser: husband (all receipts for the item have the husband's name)
Price: £3000 - £1000 paid on husbands credit card, £2000 paid on spouses credit card

Would you likely be covered by section 75 here as you have paid over £100 on a credit card in your name?

It's unclear from your two scenarios of who the primary cardholder (or debtor to use CCA language) is? 

The CCA requires there to be a three way relationship between debtor, creditor and supplier with no others involved (ignoring the merchant account provider which the courts have already ruled is acceptable). The debtor must be in contract with the supplier, the debtor must have a regulated credit agreement with the creditor, the creditor must have paid the monies to the supplier. 

ro1892

DullGreyGuy said:

ro1892 said:

I understand that if a purchase is in your name but you use a credit card in someone else name to pay (e.g. a spouse) then you are unlikely to be covered by section 75.

What about if a mixture of credit cards was used to pay, for example:
Purchaser: husband (all receipts for the item have the husband's name)
Price: £3000 - £1000 paid on husbands credit card, £2000 paid on spouses credit card

Would you likely be covered by section 75 here as you have paid over £100 on a credit card in your name?

It's unclear from your two scenarios of who the primary cardholder (or debtor to use CCA language) is? 

The CCA requires there to be a three way relationship between debtor, creditor and supplier with no others involved (ignoring the merchant account provider which the courts have already ruled is acceptable). The debtor must be in contract with the supplier, the debtor must have a regulated credit agreement with the creditor, the creditor must have paid the monies to the supplier. 

In this scenario the purchaser of the £3000 item is the husband, £1000 of the £3000 is paid using the husband's credit card (he is the primary and only cardholder for that card) and the remaining £2000 paid on the wife's credit card (she is the primary and only cardholder of that card).

Based on what you said about the 3 way relationship and "no others involved" I assume section 75 protection wouldn't work due to the purchase being split of multiple people's credit cards (even though the purchaser has paid over £100 on a credit card where they are the primary cardholder)?

DullGreyGuy

ro1892 said:

DullGreyGuy said:

ro1892 said:

I understand that if a purchase is in your name but you use a credit card in someone else name to pay (e.g. a spouse) then you are unlikely to be covered by section 75.

What about if a mixture of credit cards was used to pay, for example:
Purchaser: husband (all receipts for the item have the husband's name)
Price: £3000 - £1000 paid on husbands credit card, £2000 paid on spouses credit card

Would you likely be covered by section 75 here as you have paid over £100 on a credit card in your name?

It's unclear from your two scenarios of who the primary cardholder (or debtor to use CCA language) is? 

The CCA requires there to be a three way relationship between debtor, creditor and supplier with no others involved (ignoring the merchant account provider which the courts have already ruled is acceptable). The debtor must be in contract with the supplier, the debtor must have a regulated credit agreement with the creditor, the creditor must have paid the monies to the supplier. 

In this scenario the purchaser of the £3000 item is the husband, £1000 of the £3000 is paid using the husband's credit card (he is the primary and only cardholder for that card) and the remaining £2000 paid on the wife's credit card (she is the primary and only cardholder of that card).

Based on what you said about the 3 way relationship and "no others involved" I assume section 75 protection wouldn't work due to the purchase being split of multiple people's credit cards (even though the purchaser has paid over £100 on a credit card where they are the primary cardholder)?

You look at each transaction in isolation... the husband's S75 would succeed as for that payment all is good. S75 makes the bank jointly liable for the full contract not just up to the value they funded. 

Wife's credit card will certainly initially decline a S75 because she is not party to the contract. There are some examples on the Financial Ombudsman on people successfully arguing that it was a joint purchase despite what the invoice says but given the full amount is covered by the other card issuer its not a fight worth having. 

The one thing you cannot do is claim the full £3,000 from both cards (or at least get payment from both, you could start the process with both and then withdraw one) as doing so is undue enrichment. 

pochisoldi

Assumption: The supplier is bang to rights and if the matter went to court, not withstanding S75, they would be liable for any loss.

When there's more than one credit provider, the joint+several liability is shared between all the lenders and the supplier.

You sue the supplier and all the lenders (because they are jointly liable), and then you pick the party that is most likely to come up with the money for enforcement (because each party is severally liable).

In the case in question, the primary cardholder goes after their lender, as there is a clear-cut contractual relationship between cardholder and lender.

If a secondary cardholder goes after the lender, they have to prove that the transaction was for the benefit of the primary cardholder - another hoop to jump through.

Given that liability is "several" - you pick the easiest target - whoever was lending to the primary cardholder.
If that lender wants to recover money from one of their co-defendants, that's their choice.

PochiSoldi

DullGreyGuy

pochisoldi said:

If a secondary cardholder goes after the lender, they have to prove that the transaction was for the benefit of the primary cardholder - another hoop to jump through.

Which clause in S75 do you think you are basing that on @pochisoldi? Every time I've read the section there is not a single mention of "benefits" or equivalent. 

The law states that there must be a direct relationship between the debtor and the supplier and makes no mention of benefits. The FOS, who acknowledge they are bound to find a fair resolution rather than to mirror what a court would decide, has on occasions been able to be convinced a purchase was a joint purchase even if the debtors name didnt appear on the invoice. Its unrelated to benefit still though, there is an example of a joint gift where the parents had gone to the shop to choose it together, simply the secondary cardholder had got their card out faster, the gift tag on the gift said "from mum & dad" etc. No benefit to the primary cardholder as it was a gift to a third party but FOS accepted it was a joint purchase. 

pochisoldi

DullGreyGuy said:

pochisoldi said:

If a secondary cardholder goes after the lender, they have to prove that the transaction was for the benefit of the primary cardholder - another hoop to jump through.

Which clause in S75 do you think you are basing that on @pochisoldi? Every time I've read the section there is not a single mention of "benefits" or equivalent. 

The law states that there must be a direct relationship between the debtor and the supplier and makes no mention of benefits. The FOS, who acknowledge they are bound to find a fair resolution rather than to mirror what a court would decide, has on occasions been able to be convinced a purchase was a joint purchase even if the debtors name didnt appear on the invoice. Its unrelated to benefit still though, there is an example of a joint gift where the parents had gone to the shop to choose it together, simply the secondary cardholder had got their card out faster, the gift tag on the gift said "from mum & dad" etc. No benefit to the primary cardholder as it was a gift to a third party but FOS accepted it was a joint purchase. 

You forgot to quote this line:

"In the case in question, the primary cardholder goes after their lender, as there is a clear-cut contractual relationship between cardholder and lender."

Note that whether a contractual relationship exists is determined by the body of contract law, not the Consumer Credit Act. Once that debtor-supplier-creditor relationship is held to exist, the CCA kicks in.
















 

DullGreyGuy

pochisoldi said:

DullGreyGuy said:

pochisoldi said:

If a secondary cardholder goes after the lender, they have to prove that the transaction was for the benefit of the primary cardholder - another hoop to jump through.

Which clause in S75 do you think you are basing that on @pochisoldi? Every time I've read the section there is not a single mention of "benefits" or equivalent. 

The law states that there must be a direct relationship between the debtor and the supplier and makes no mention of benefits. The FOS, who acknowledge they are bound to find a fair resolution rather than to mirror what a court would decide, has on occasions been able to be convinced a purchase was a joint purchase even if the debtors name didnt appear on the invoice. Its unrelated to benefit still though, there is an example of a joint gift where the parents had gone to the shop to choose it together, simply the secondary cardholder had got their card out faster, the gift tag on the gift said "from mum & dad" etc. No benefit to the primary cardholder as it was a gift to a third party but FOS accepted it was a joint purchase. 

You forgot to quote this line:

"In the case in question, the primary cardholder goes after their lender, as there is a clear-cut contractual relationship between cardholder and lender."

Note that whether a contractual relationship exists is determined by the body of contract law, not the Consumer Credit Act. Once that debtor-supplier-creditor relationship is held to exist, the CCA kicks in
 

But we the CCA requires a contractual relationship between the Debtor and the Supplier too so simply being the primary cardholder is insufficient if the contract with the supplier is in someone else's name as per the OP that was talking about Wife using her primary card to pay for Husband's purchase. 

However you'd gone down the rabbit hole of talking about "benefits" if a secondary cardholder formed the contract. Which body of contract law states that the beneficiary of a contract has to be a party to the contract? I can buy flowers to be delivered to my sick friend, I am the contracting party and they are the beneficiary. If my payment subsequently is recalled the florist has no contract with the beneficiary and cannot be pursued for the debt by the florist.