Section 75 refund - now service provider is threatening me with Court

Grumpy_chap

TheBanker said:

I don't think there's anything to prevent a bank using the Chargeback scheme to resolve a Section 75 claim. Section 75 makes the bank jointly liabe with the retailer for a breach of contract. If the bank settles the claim with the customer, this creates a debt for the retailer to the bank, which can legitimatley be recovered by the bank.

The end result being that the retailer has not been paid. The plumber is suggesting he will try to recover the value of what is now an unpaid invoice through the courts. Hopefully the evidence you used with the bank will be sufficient to show the court that the invoice is null and void as the contract was not fulfilled. 

Is that correct?

A chargeback is clear.  It is like the consumer stopping the cheque and leaves the vendor out of pocket.  The vendor can follow debt recovery processes.

In the case of S75, the CC is jointly liable for breach with the vendor. 
I always think this is harsh on the CC as the CC has no control over the delivery of service and only a small percentage of the income that the vendor receives, but the rules are the rules.
When S75 is followed, the lender takes a robust investigation line to establish facts and whether a breach has occurred.  If satisfied that this is the case, the lender reimburses the consumer directly.
It is my understanding that is then the end of the matter as far as the consumer is concerned and neither the lender nor the vendor can seek to recover the funds from the consumer.

Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

born_again

Grumpy_chap said:

TheBanker said:

I don't think there's anything to prevent a bank using the Chargeback scheme to resolve a Section 75 claim. Section 75 makes the bank jointly liabe with the retailer for a breach of contract. If the bank settles the claim with the customer, this creates a debt for the retailer to the bank, which can legitimatley be recovered by the bank.

The end result being that the retailer has not been paid. The plumber is suggesting he will try to recover the value of what is now an unpaid invoice through the courts. Hopefully the evidence you used with the bank will be sufficient to show the court that the invoice is null and void as the contract was not fulfilled. 

Is that correct?

A chargeback is clear.  It is like the consumer stopping the cheque and leaves the vendor out of pocket.  The vendor can follow debt recovery processes.

In the case of S75, the CC is jointly liable for breach with the vendor. 
I always think this is harsh on the CC as the CC has no control over the delivery of service and only a small percentage of the income that the vendor receives, but the rules are the rules.
When S75 is followed, the lender takes a robust investigation line to establish facts and whether a breach has occurred.  If satisfied that this is the case, the lender reimburses the consumer directly.
It is my understanding that is then the end of the matter as far as the consumer is concerned and neither the lender nor the vendor can seek to recover the funds from the consumer.

Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

They can but the costs of doing so are high (banks lawyers are not cheap). So they get written off within the budget. 

DullGreyGuy

Grumpy_chap said:
Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

Not if they can, S75 stipulates they can:

75(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

The question is if any actually do.

born_again said:
They can but the costs of doing so are high (banks lawyers are not cheap). So they get written off within the budget. 

Insurance lawyers are even more expensive but recovery work isn't done by lawyers but by para-legals. You can even outsource it on a contingent basis where the firm just keeps X% of what they do recover, for Motor its normally 20% or so. Obv would be much higher given the much lower level of success

Grumpy_chap

born_again said:

Grumpy_chap said:

Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

They can but the costs of doing so are high (banks lawyers are not cheap). So they get written off within the budget. 

DullGreyGuy said:

Grumpy_chap said:
Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

Not if they can, S75 stipulates they can:

75(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

Thank you both.

In the event that a lender recovered an S75 payment from the original vendor, would it then be possible for the vendor to pursue the customer?
Given the lender will have undertaken robust investigations to establish that a breach occurred, it is my reasonable opinion that such a settlement should really be final and that any attempt by the vendor to recover funds would be prone to fail (based upon the evidence already provided to the lender, so the same could be presented to defend a money claim through the courts).
The middle-ground would be where the lender did not require whatever goods were involved to be returned but the remedy then would seem to be that the defective goods are returned rather than paying for them.

HillStreetBlues

PixieE said:

la531983 said:

Do you have proof he didnt fix it?

As you are finding out, S75 isnt a silver bullet.

Yes. I have proof. They also forged my signature to show i ‘accepted’ the work. They are criminals

If that's the case i can't see them following the threat to take you to court.

DullGreyGuy

Grumpy_chap said:

born_again said:

Grumpy_chap said:

Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

They can but the costs of doing so are high (banks lawyers are not cheap). So they get written off within the budget. 

DullGreyGuy said:

Grumpy_chap said:
Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

Not if they can, S75 stipulates they can:

75(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

Thank you both.

In the event that a lender recovered an S75 payment from the original vendor, would it then be possible for the vendor to pursue the customer?
Given the lender will have undertaken robust investigations to establish that a breach occurred, it is my reasonable opinion that such a settlement should really be final and that any attempt by the vendor to recover funds would be prone to fail (based upon the evidence already provided to the lender, so the same could be presented to defend a money claim through the courts).
The middle-ground would be where the lender did not require whatever goods were involved to be returned but the remedy then would seem to be that the defective goods are returned rather than paying for them.

The "problem" is always going to be that irrespective of if there is a legitimate case to pursue the customer or not doesn't automatically stop them threatening to nor issuing proceedings. If they dont have a right then obviously they lose the case and end up losing the court costs but that doesn't remove the time effort or worry for the customer and inevitably some will pay up rather than have to go to court. 

I'm not going to opine on if they'd be entitled to or not. I would imagine there is a marked difference between where the vendor banks with the same bank as the customer and therefore the bank can potentially just take the money -v- where they're a different bank in which case it may be more the case of the bank litigating against the vendor and the vendor then calling the customer as co-defendant. 

born_again

Grumpy_chap said:

born_again said:

Grumpy_chap said:

Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

They can but the costs of doing so are high (banks lawyers are not cheap). So they get written off within the budget. 

DullGreyGuy said:

Grumpy_chap said:
Opinion seems divided as to whether after paying out an S75 claim, the lender can recover funds from the vendor.  I am not sure that anyone in this forum knows for certain.

Not if they can, S75 stipulates they can:

75(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

Thank you both.

In the event that a lender recovered an S75 payment from the original vendor, would it then be possible for the vendor to pursue the customer?
Given the lender will have undertaken robust investigations to establish that a breach occurred, it is my reasonable opinion that such a settlement should really be final and that any attempt by the vendor to recover funds would be prone to fail (based upon the evidence already provided to the lender, so the same could be presented to defend a money claim through the courts).
The middle-ground would be where the lender did not require whatever goods were involved to be returned but the remedy then would seem to be that the defective goods are returned rather than paying for them.

Yes retailer could still go to court, if lender recovered funds from them. I think we can all guess how successful that might be. 

This is one reason a chargeback is used 1st when that option is there.
Imagine lender pays out under S75, then claims money back via chargeback, as that right is there. You can imagine many people would not be happy to then receive a court claim. 🤷‍♀️

Grumpy_chap

DullGreyGuy said:

I'm not going to opine on if they'd be entitled to or not. I would imagine there is a marked difference between where the vendor banks with the same bank as the customer and therefore the bank can potentially just take the money -v- where they're a different bank in which case it may be more the case of the bank litigating against the vendor and the vendor then calling the customer as co-defendant. 

Sorry to labour a point, but in this case, wouldn't the bank call the customer as co-claimant or as a witness to give evidence on behalf of the claimant?
I can imagine in the vendor called the customer as co-defendant, the customer would simply report the terrible service / product that the vendor provided and rubbish the vendor's actions, so not a very successful defence.

DullGreyGuy

Based on the language of the terms in 75(2) I would say this isn't strictly subrogation and as the customer has been fully repaid already they couldn't be co-claimant. This is different to insurance because when an insurer indemnifies their customer there is subrogation, ie they inherit all the customer's legal rights hence when we've failed to recover the money from a third party after an accident we can issue proceedings either in our name or our customers name.

I suspect were a bank to attempt a recovery they'd take the written evidence already supplied by their customer as sufficient without adding the inconvenience of having to attend court as a witnesses. In my world we do need customers to be present at court and hence our terms of our policies state they must support our efforts fully.