Financial Ombudsman win, but who owns the goods, merchant or bank?

Spride

born_again said:

Spride said:

I make the assumption that as the bank was at fault they have paid out of a presumed fund banks must keep for such events, correct me if I'm wrong? 

The merchant, on refusing to comply with the consumer rights act arrange a refund and collect the non running car, was informed that storage of £60 per day would be charged, currently standing at over £11,000, the car was £5,000

Another question, if the bank has incorrectly reversed a chargeback, and returned the money to the merchant they don't have a second go at claiming it back from the merchants bank, leaving them with court as the only option, this would be between the merchant and the bank, not sure how the merchant can come to me for the car? Of course they are welcome to it on settling the storage charge.

If you want the storage charge you need to take dealer to court. Odds of getting the funds given their refusal to follow the CRA.

Banks can't reverse a chargeback, only retailer can reject it. Although they could choose the wrong reason which would scupper it. Only 1 chance at a chargeback. No they would not take a retailer to court to reclaim the money. simply not cost effective.

Funds will come from the complaints budget, which in effect is a bottomless pit.

Thanks Born Again, so essentially, the bank would likely have just absorbed the odd loss? Not sure if would be viable to try and reclaim losses from the merchant, he claimed to have no money which was why he refused a refund, so I guess he wins, we break even, the bank loses on this occasion?

the_lunatic_is_in_my_head

born_again said:No they would not take a retailer to court to reclaim the money. simply not cost effective.

Funds will come from the complaints budget, which in effect is a bottomless pit.

Purely out of interest, is there any limit on this @born_again? OP aside, say it was a £100k car? 

Spride

Jenni_D said:

You say you did a chargeback and the bank repaid you the money.(As I understand things, your bank recovered the funds from the seller's merchant bank and repaid them to you).

You also say (imply?) that the bank "snatched" the money back from your account - on what basis? Was it on the basis that the original seller challenged the chargeback? If yes then I'm not really sure what the bank did wrong, nor why FOS reached the decision they did. 🤷‍♀️

Hi Jenni,
I could write a book on this, in simple terms, the merchant was in breach of the consumer rights act and supply of goods act, supplying goods not of merchantable quality, refusing refund or even repair (an option they were offered but also rejected) , bank sided with me then returned the money to the merchant on highly spurious grounds (basically lies that were disproved when FOS got involved), only about a third of cases are upheld by the FOS, on this occasion they were correct.

Sadly on reading reviews this company does exactly the same thing over and over, and despite contacting trading standards in the area they seem to have no interest in addressing it, so the garage will continue robbing people.

born_again

the_lunatic_is_in_my_head said:

born_again said:No they would not take a retailer to court to reclaim the money. simply not cost effective.

Funds will come from the complaints budget, which in effect is a bottomless pit.

Purely out of interest, is there any limit on this @born_again? OP aside, say it was a £100k car? 

Not that I'm aware of. I do know that the Breast Implant problem years ago cost well over £10 million in S75 refunds. No action was taken to recover.🤷‍♀️ 

Spride

Someone else who has had the same issue, trading standards could have put a stop to this!

Spride

the_lunatic_is_in_my_head said:

Spride said:

 if the bank has incorrectly reversed a chargeback, and returned the money to the merchant they don't have a second go at claiming it back from the merchants bank, leaving them with court as the only option, this would be between the merchant and the bank, not sure how the merchant can come to me for the car?

If the bank gets the money out of the merchant via the courts I guess the merchant could come after you via the courts. I think it's unlikely (although the value may change that) but if you reject goods there is a duty to make them available for collection or, if agreed return them which leads on to.... 

Spride said:

The merchant, on refusing to comply with the consumer rights act arrange a refund and collect the non running car, was informed that storage of £60 per day would be charged, currently standing at over £11,000, the car was £5,000

Unless the storage fee was part of the original contract it wouldn't be enforceable, changes to the contract would require express agreement from both parties. 

If you suffered genuine loses as a result of a breach of contract you could claim these as damages, extreme example but if it was £1 million worth a gold you have good argument for paying to keep it somewhere very safe, a car should be parked up on the drive/garage.

If you didn't have a drive or such then perhaps it's fair to claim the cost of the tax and insurance required to keep it on the public highway. 

I think you will find the original contract was breached as soon as the merchant refused to honour the right to a refund on faulty goods!

HillStreetBlues

Have you a link to the ruling?

Spride

HillStreetBlues said:

Have you a link to the ruling?

The ruling between the bank and myself, mediated by FOS? Irrelevant, no mention of the 'good's' as a previous contributor stated, the FOS only decided on the financial aspect and whether the bank carried out their role with due diligence.

born_again

Spride said:

HillStreetBlues said:

Have you a link to the ruling?

The ruling between the bank and myself, mediated by FOS? Irrelevant, no mention of the 'good's' as a previous contributor stated, the FOS only decided on the financial aspect and whether the bank carried out their role with due diligence.

FOS rulings are made public.
As someone in that field. Would be interesting to know the actual reason for the result. It is very relevant.👍

If retailer rejects chargeback, bank can only go back with new info & have a limited 21 days to do so. Visa/Mastercard then sit in judgement on this matter & is binding.

PHK

Undervalued said:

PHK said:

The ombudsman should have covered this off in the decision. As their policy seems to be it’s unfair for you to have refund and use of the car.  They normally say that you should arrange return of the car to the bank. This could be as simple as dropping it off at a nominated garage or handing a represents the keys when they collect it. 

I would go back to the ombudsman for clarification. 

The bank won’t be able to get the money using chargeback (you’ve slightly misunderstood how it works) but there’s nothing stopping the bank suing the car dealer / retailer. 

I don't see why. The FOS was adjudicating on the banking aspects of this, that is all. They are not making a judgement about whether the OP was right or wrong in their dispute with the merchant. Just like, in the old days, stopping a cheque. Under certain circumstances the banking rules allowed you to do that but it doesn't decide whether you have a legal right not to pay for the goods or services.

Generally the customer cannot "have the penny and the bun". If they are not paying for the goods they have no right to keep them unless the merchant chooses to write them off as a gesture of goodwill. 

You can check this on the FOS website where they publish ombudsman decisions in nearly every case they give a decision as to what should happen to the vehicle.