Section 75 Claim

Tideriley

Dear Esteemed Members,

Need an advise please.

Issue:

I purchased a car a few months back using part Credit Card and Bank Transfer payment. Due to multiple issues with the car and the dealer refusing to fix them, I had to raise a Dispute with the bank.

Chargeback and Section 75:

The bank initially raised a chargeback claim for the Credit Card Payment which has been successful after 60 days and is in my account. The next step as suggested by the bank is to raise a Section 75 claim to recover the balance amount made by Bank Transfer.

Questions:

However the Bank is now suggesting me to scrap the car immediately and after that they would raise a Section 75 claim for the remaining balance (Balance for the car - Scrap Invoice).

At this point I have the following questions (after I scrap the car):

1. What happens if S75 claim is not successful or I receive only a portion of money but not 100% refund?

2. After I scrap the car as suggested by the bank, can the dealer ask for the car back? I sent an email to the dealer to take the car back for full refund (2 months ago) but they did not respond.

3. Can I propose to the bank for me to retain the car and not scrap it yet but still pay me the (Market Rate - Proposed Scrap Value) as part of S75?

4. If I don't go forward with the S75 claim, can I retain the car and use the Chargeback amount to fix the car myself from a garage?

5. Can I propose to the bank to retain the car and drive it until MOT expiry and at that point decide whether to scrap or fix the car out of my own pocket?

Any suggestions are welcome please

Thanks in advance!

born_again

Bank will not take the car.

You could keep the car & fix, but you would have no S75 claim. As it is clear that you basis is that the car is fit for scrap & bank will not give you money back & allow you to keep car under S75.

I think keeping it till MOT expires could lead to a rejection of a S75 as they will feel that there has not been a breech of contract. Given your continued use of the car.

eskbanker

Tideriley said:

However the Bank is now suggesting me to scrap the car immediately and after that they would raise a Section 75 claim for the remaining balance (Balance for the car - Scrap Invoice).

Just to be clear, the bank doesn't really 'raise a s75 claim', they respond to one that you raise, i.e. in doing so you're holding them legally liable.  In your shoes, I think I'd be inclined to agree that I'd be looking for them to confirm settlement prior to you scrapping the car, rather than the risk exposure inherent in doing it the other way round....

DullGreyGuy

Tideriley said:

Dear Esteemed Members,

Need an advise please.

Issue:

I purchased a car a few months back using part Credit Card and Bank Transfer payment. Due to multiple issues with the car and the dealer refusing to fix them, I had to raise a Dispute with the bank.

Chargeback and Section 75:

The bank initially raised a chargeback claim for the Credit Card Payment which has been successful after 60 days and is in my account. The next step as suggested by the bank is to raise a Section 75 claim to recover the balance amount made by Bank Transfer.

Questions:

However the Bank is now suggesting me to scrap the car immediately and after that they would raise a Section 75 claim for the remaining balance (Balance for the car - Scrap Invoice).

At this point I have the following questions (after I scrap the car):

1. What happens if S75 claim is not successful or I receive only a portion of money but not 100% refund?

2. After I scrap the car as suggested by the bank, can the dealer ask for the car back? I sent an email to the dealer to take the car back for full refund (2 months ago) but they did not respond.

3. Can I propose to the bank for me to retain the car and not scrap it yet but still pay me the (Market Rate - Proposed Scrap Value) as part of S75?

4. If I don't go forward with the S75 claim, can I retain the car and use the Chargeback amount to fix the car myself from a garage?

5. Can I propose to the bank to retain the car and drive it until MOT expiry and at that point decide whether to scrap or fix the car out of my own pocket?

Any suggestions are welcome please

Thanks in advance!

It sounds like you have oversold the problems with the car and made it appear that it is only fit for the scrap yard. If its only scrap then...

The scrap is an asset that has a value, that value need to be ascertained. You dont have to actually scrap the vehicle but it is right that a scrap merchant give you a pro forma invoice and you send that to your bank to reduce the settlement by the appropriate amount. 

Most the rest of your questions are then irrelevant because you can't fix scrap etc 

If the car is repairable then you should be submitting quotes to fix it which would be settled less the amount already paid via the chargeback unless the estimates exceed the vehicle value in which case its beyond economical repair and the repayment would be capped at vehicle value less chargeback less scrap value. 


The problem with the chargeback is that you have now only part paid the dealer but you are still holding the asset. The dealer could ask for the car back but would need to give you most of the remainder of the money back but this then risks undue enrichment. Alternatively they could pursue you for the unpaid element. 

Tideriley

born_again said:

Bank will not take the car.

You could keep the car & fix, but you would have no S75 claim. As it is clear that you basis is that the car is fit for scrap & bank will not give you money back & allow you to keep car under S75.

I think keeping it till MOT expires could lead to a rejection of a S75 as they will feel that there has not been a breech of contract. Given your continued use of the car.

Thank you for your response.

So if I don't raise the S75 claim and retain the car with me, and fix it with my own money (+ the chargeback refund which I have received), can the dealer ask for the car back in future and will I be in any breach from legal perspective please?

Tideriley

eskbanker said:

Tideriley said:

However the Bank is now suggesting me to scrap the car immediately and after that they would raise a Section 75 claim for the remaining balance (Balance for the car - Scrap Invoice).

Just to be clear, the bank doesn't really 'raise a s75 claim', they respond to one that you raise, i.e. in doing so you're holding them legally liable.  In your shoes, I think I'd be inclined to agree that I'd be looking for them to confirm settlement prior to you scrapping the car, rather than the risk exposure inherent in doing it the other way round....

Thanks for your response, I was thinking about the same.

Unfortunately, bank is quite persuasive to see a proof of sale/scrap before they can process the S75 claim and provide me a settlement figure. If I am happy with the settlement, then they will process the settlement amount.

Loads of ifs and buts in their communications, that's why I am a bit hesitant to scrap the car immediately. I have gone back to them to ask for advise.

born_again

Tideriley said:

born_again said:

Bank will not take the car.

You could keep the car & fix, but you would have no S75 claim. As it is clear that you basis is that the car is fit for scrap & bank will not give you money back & allow you to keep car under S75.

I think keeping it till MOT expires could lead to a rejection of a S75 as they will feel that there has not been a breech of contract. Given your continued use of the car.

Thank you for your response.

So if I don't raise the S75 claim and retain the car with me, and fix it with my own money (+ the chargeback refund which I have received), can the dealer ask for the car back in future and will I be in any breach from legal perspective please?

Yes, as a chargeback takes the money from the retailers bank account.

If retailer does not contest they could also take you to court to reclaim the money lost.

Chargebacks have no legal standing, they are simply card regulations that both you (via banks & retailer agree to by agreeing to use their payment method). They are over & above your consumer rights.

But saying to bank it is only fit for scrap & then saying here you could fix it is silly, as bank will require a 3rd party report for a S75 claim. Which is going to shoot you in the foot. When they give their opinion 🤷‍♀️

Tideriley

born_again said:

Tideriley said:

born_again said:

Bank will not take the car.

You could keep the car & fix, but you would have no S75 claim. As it is clear that you basis is that the car is fit for scrap & bank will not give you money back & allow you to keep car under S75.

I think keeping it till MOT expires could lead to a rejection of a S75 as they will feel that there has not been a breech of contract. Given your continued use of the car.

Thank you for your response.

So if I don't raise the S75 claim and retain the car with me, and fix it with my own money (+ the chargeback refund which I have received), can the dealer ask for the car back in future and will I be in any breach from legal perspective please?

Yes, as a chargeback takes the money from the retailers bank account.

If retailer does not contest they could also take you to court to reclaim the money lost.

Chargebacks have no legal standing, they are simply card regulations that both you (via banks & retailer agree to by agreeing to use their payment method). They are over & above your consumer rights.

But saying to bank it is only fit for scrap & then saying here you could fix it is silly, as bank will require a 3rd party report for a S75 claim. Which is going to shoot you in the foot. When they give their opinion 🤷‍♀️

Again, thanks for your response. 

When raising the chargeback claim with the bank, I provided an independent report from a garage for repairs and the repair cost exceeded the price of the car. 

At this point, I want to know what are my options (covering the legal side of course). I would like to avoid a court case as I donot want to involve solicitors and pay more money, so want to know the best possible option. 

1. If I scrap the car and raise S75, then can the dealer contest or take me to court?

2. I can technically fix the car myself and with help of my friends to bring down the labour cost but still probably would cost me 70% of the car price, hence wanted to know if I can retain the car now that I have the chargeback refund. 

The bank didn't provide me much option when discussing about the S75 claim but to scrap the car immediately and they can provide me with the settlement amount. However when I asked them that the dealer can ask for the car back, they asked me to seek advise. 

3. Since I had already given time to the dealer to collect the car (60 days ago via email) and I would assume the bank has also given them notice to contest/challenge (again more than 60 days ago) the case, has the dealer not already exceeded the time to collect the car legally. Is there a legal time limit for them to contest the decision or to do a court case beyond which they lose rights for the car? 

Thanks for your advise. 

DullGreyGuy

1. Yes, but then anyone can sue anyone else no matter how vexatious the claim. The dealer doesn't get a say on the S75 because thats funded by the bank themselves

2. What's the value of the salvage? Normally it would be under 30% and as such the claim should be changed to 70% of the value less the value of the salvage and the chargeback already received.

3. The law of limitations is 6 years from the breach of contract so in this case it would be from the date the money was taken from their account.