Section 75 or Chargeback advise?

DullGreyGuy

bery_451 said:

The problem with chargebacks is there humans (beings that have emotions not Ai) at the company that might take chargebacks personal regardless if they are liable or not and thus they will pass the chargeback to debt recovery bailiffs. So S75 are better than chargebacks because with chargebacks there is a risk of the chargeback being passed to the debt recovery bailiffs. If they were a professional company then they wouldn't take things personally however professionalism has sank in the UK in the past couple of decades.

They can, it's exceptionally rare though. Most chargebacks are under £10,000 so fall into the Small Track of the court process meaning legal costs cannot be recovered. A small family business may go to court without legal advice but most companies won't and so its cost prohibitive if they are making a commercial rather than emotional decision.

bery_451 said:

Alright what if the invoice receipt is in someone name, cardholder who paid can still raise dispute? For example paying a service being done at your relative address.

If the invoice is in the name of the relative then the default position will be the D-C-S triangle/chain is broken as the debtor isn't in contract with the supplier. If the paperwork shows the debtor is the contracting party and it just so happens the goods/services are being delivered to a third party that isn't an issue, though some Creditors could challenge if you were actually the contracting party. 

bery_451

Still trying to understand that Creditor/Supplier/Debtor Triangle. Is there like a diagram showing this?

Okay there chargebacks and Section 75s, both are different separate correct? Also to confirm the Debtor cannot choose which 1 to claim under?

What are the Deadlines for Chargebacks and Section 75s? 120 days?

What about a Section 75 claim that falls under £10,000? So for Chargebacks under £10,000 you saying companies that try to undo this chargeback will not get their legal fees covered if they win the case against the customer?

DullGreyGuy

bery_451 said:

Still trying to understand that Creditor/Supplier/Debtor Triangle. Is there like a diagram showing this?

Okay there chargebacks and Section 75s, both are different separate correct? Also to confirm the Debtor cannot choose which 1 to claim under?

What are the Deadlines for Chargebacks and Section 75s? 120 days?

What about a Section 75 claim that falls under £10,000? So for Chargebacks under £10,000 you saying companies that try to undo this chargeback will not get their legal fees covered if they win the case against the customer?

The D-C-S is simply that there must be a direct relationship between the parties. You have to remember that when the CCA was drafted credit cards were almost unheard of and most relevant credit was the type of in store credit you get if you go to a furniture or car shop and they offer you credit from BlackHorse etc. Technically with credit cards there is a forth party which is the bank of the supplier but the House of Lords (as the most senior court before the Supreme Court was created) ruled many years ago that we can turn a blind eye to them. 

S75 and Chargebacks are totally different... S75 is more fully Section 75 of the Consumer Credit Act and you can read it https://www.legislation.gov.uk/ukpga/1974/39/section/75 

Chargebacks are part of the Visa, Mastercard and AmEx card network rules and arent statute. 

Chargeback rules are set by the network and the rules vary a little between the different networks. Generally you have up to 120 days from when the goods/services should have occurred but there is also an overarching 540 day limit from the date of the transaction. So were you to buy a holiday today for 2027 and the company went bust in late 2026 you couldn't do a chargeback as whilst still within the 120 days limit you've exceeded the overall cap. 

S75 has no discrete timelimit, it simply mirrors the liability of the Supplier to the Creditor. So in the UK the law of limitations is 6 years for a simple contract, which most S75 claims will fall under. However S75 isn't limitied to UK based transactions so if you buy something overseas and there is a problem with it at a later date the time limit may be more or less than 6 years because the contract would fall under the legal jurisdiction of the country you were visiting. 

S75 is paid for by the bank themselves. The law does allow them the right to sue the Supplier but those that work in card disputes on here advise it almost never happens, even when you get systemic issues like the problems with breast implants a number of years ago where millions were paid out. Given the Bank has made the choice to pay you they are not then going to sue you unless they find evidence of fraud. 

The rules on court fees are contained within the Civil Procedural Rules, effectively there are now four "tracks" in the court based on complexity... Small, Fast, Intermediary and Multi. Each have their own rules on what costs the loser should pay. Value of the claim is used as a proxy of complexity but it's not a hard rule. Typically something under £10k goes to Small Track (aka small claims court), Under £25k to Fast Track etc. 

In Small Track legal fees are not ordinarily considered. In Fast Track they are fixed based on the value of the award. Note however the judge has significant discretion, so if one party has breached the CPR pre-action protocol (eg you didnt even approach the bank about making a S75 but instead just immediately issued court proceedings against them) then the judge can award costs against you despite being a small track case (court is supposed to be last resort, your required to try to deal with matter before going to court and are required to give warning that you will be issuing) 

A chargeback isn't a legal right or an ultimate resolution of a problem, it's a network rule. As such the Supplier is free to take other action to recover the monies if they wish (vast majority dont). Things like the CPR and Law of Limitations are much broader than just chargebacks and S75