Cancelled a service paid by credit card but refund offered to my current account (what protection)

underbelly

I'll try to make a long story short..

I contacted a very small company just over two weeks ago who provide a service as their product. Their service costs £600 initially and later another £400 for the second part. After an initial free consultation, my daughter paid the first payment over the phone with her Mastercard credit card but overnight we then had cold feet, read a few negative reviews and decided that it was not the right decision.

So, the next day before even clicking on their Terms and Conditions acceptance link which they emailed or giving them enough details to allow them to start the service, we sent them a cancellation email. Things were quiet, so I phoned and eventually ended-up sending a letter by Recorded Delivery requesting cancellation within the 14-days cooling-off period and the money back to my daughters credit card.

My first question is, since my daughter paid for a service to be provided to me on her credit card, is she covered by Section 75 of the regulations?

Secondly, indeed the company has reached-out to offer a refund (they did not say how much) but crucially they have said they are "having technical issues with their internal payment system regarding processing refunds" and have asked for my current account bank details. At the moment, I was hoping that we were covered under Section 75 and her card would hold equal responsibility. My worry is that by accepting a payment to my current account that it will take her out of the Section 75 protection if they don't then refund or refund less, or worse try to take the second payment from my account (which would be theft).

What is the best thing to do as I am uneasy about giving them my bank details? If I hadn't read the negative reviews I'd be happy to give them the chance to refund to my bank but I don't 100% trust them, especially after what seemed like initial delaying tack-ticks to push everything beyond the 14 days distance regulations, until I sent that registered letter.

I could ask my card to start a "charge back" but don't know if it would be any more likely that they could process it without fuss or excuses? It would also take a long time and they could claim I am making it difficult and so don't want the money back as offered.

Lastly, if we are not covered anyway by Section 75 and they don't make the repayment, what recourse do we then have?

Thanks.

molerat

Service contracts are a bit of a complicated one. There is no relationship between your daughter and the supplier so s75 will not apply.  Depending on precisely what the service was you would generally have a 14 day cooling off period, but, have they already started supplying the service ?  If you cancelled in line with the T&Cs of the contract then a chargeback would be valid according to the FOS website.  There is not a lot they could do with your bank account details - if you had paid with a cheque they would have had them, they have your daughter's card number and there is more chance of them running amok with that if they were that dodgy.

https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/credit-borrowing-money/goods-services-bought-credit

A bank or lender doesn’t have to raise a chargeback. But if valid reasons exist, it can be good practice for them to do so. 

These are often valid reasons for raising a chargeback:

• the goods or services received don’t match the description
• the goods never turned up or the supplier never provided the service
• the goods arrived but were broken or otherwise defective
• the supplier says they were processing a refund, but you never got one
• the supply of goods or services was cancelled in line with the supplier’s policy, but no refund was paid

born_again

She cancelled the contract. So no S75

Chargeback does not cover change of mind.

underbelly

@molerat and @born_again, thanks for the replies.

Ok, so no S75 cover and additionally no charge back then. We will remember this when my daughter buys me anything on her card, which she does quite often.

They couldn't really start the service because we didn't formally give them the information they would need, although they could have taken some information from our informal initial consultation.

With regard to the T&Cs, they were emailed to us after we paid the initial fee and we never followed their link to accepted them. They were not explained to us before paying and so I considered us not under them. However, even if so in their eyes, they do state about a 14-day cancellation period after receiving a physical letter by recorded delivery (their only accepted method), hence us doing that to make sure.

We prevented them quickly taking more money from the credit card by getting the card to change the number the next day. I believe that would not have affected them processing a refund to the card though?

I believe they cannot take money just using an account number and sort code? So maybe we should give them the chance to refund to a current account, but make sure prior that they intend to pay the full amount and keep copies of all communications. If that never happens though and they go silent again then is the Ombudsman or Trading Standards our only possible recourse?

born_again

underbelly said:

@molerat and @born_again, thanks for the replies.

Ok, so no S75 cover and additionally no charge back then. We will remember this when my daughter buys me anything on her card, which she does quite often.

They couldn't really start the service because we didn't formally give them the information they would need, although they could have taken some information from our informal initial consultation.

With regard to the T&Cs, they were emailed to us after we paid the initial fee and we never followed their link to accepted them. They were not explained to us before paying and so I considered us not under them. However, even if so in their eyes, they do state about a 14-day cancellation period after receiving a physical letter by recorded delivery (their only accepted method), hence us doing that to make sure.

We prevented them quickly taking more money from the credit card by getting the card to change the number the next day. I believe that would not have affected them processing a refund to the card though?

I believe they cannot take money just using an account number and sort code? So maybe we should give them the chance to refund to a current account, but make sure prior that they intend to pay the full amount and keep copies of all communications. If that never happens though and they go silent again then is the Ombudsman or Trading Standards our only possible recourse?

Even if you used your card. The answer would be the same.

There is no cover for change of mind.

Change of card number does not stop a retailer from processing CPA, they apply for the new card number from Visa/Mastercard by their systems. 
To make sure they do not, she needs to speak to bank & advise that she has cancelled with retailer & can they stop future payments.

elsien

And to ensure there is a link between the payee and the supplier in future, you could consider getting your own credit card. 

molerat

born_again said:

Chargeback does not cover change of mind.

The FOS website differs on that point

the supply of goods or services was cancelled in line with the supplier’s policy, but no refund was paid

retiredbanker1

What was the service? Was it bespoke to you in any way?

You won't lose anything at present by giving them your bank details to facilitate the refund. (However playing devils advocate here you could in theory stick to them because they should pay back to the credit card debited (Visa & Mastercard rules and probably anti money laundering laws).

So if the monies do not turn up in your account then your daughter can male a claim (as long as you can prove that they accepted the cancellation).

born_again

molerat said:

born_again said:

Chargeback does not cover change of mind.

The FOS website differs on that point

the supply of goods or services was cancelled in line with the supplier’s policy, but no refund was paid

That would then be no refund processed. But has a strict criteria. Date, amount & last 4 of card that retailer processed the refund.

There is no chargeback for change of mind. Just like if you buy something in store, you have no change of mind right to a refund. Unless retailer offers over & above the consumer rights.

underbelly

Giving an update on this ongoing problem and asking for more advice please..

My daughters credit card has again offered to credit the money back to her and pass to their disputes department, but I presume they would only end-up taking the money back off her again after investigating since (as discussed here) S75 does not seem to apply (since she paid for a service benefiting me). Do you think this will be the case and just a waste of time or do you think offering an immediate credit is going above S75 rules?

Despite me serving via Recorded Delivery a formal cancellation letter and request for refund to the company, then providing my bank details when they said they were "having technical difficulties processing a credit card refund”, we have now been ghosted by the general manager and all emails not replied too. He of course is “always busy” when we phone.

So what courses of action do we now have, is it only the Small Claims Court left to us, which is hassle? We feel they are dragging this out so that we either give-up or enough time passes that we don't have a claim any more.

Any advice please as we now need the money back urgently for personal reasons.. because we cancelled next day, they have provided nothing for the money. We did not accept their T&Cs but even if we had they are breaking them themselves by not refunding within their stated 14 days for services not provided.

born_again

underbelly said:

Giving an update on this ongoing problem and asking for more advice please..

My daughters credit card has again offered to credit the money back to her and pass to their disputes department, but I presume they would only end-up taking the money back off her again after investigating since (as discussed here) S75 does not seem to apply (since she paid for a service benefiting me). Do you think this will be the case and just a waste of time or do you think offering an immediate credit is going above S75 rules?

Despite me serving via Recorded Delivery a formal cancellation letter and request for refund to the company, then providing my bank details when they said they were "having technical difficulties processing a credit card refund”, we have now been ghosted by the general manager and all emails not replied too. He of course is “always busy” when we phone.

So what courses of action do we now have, is it only the Small Claims Court left to us, which is hassle? We feel they are dragging this out so that we either give-up or enough time passes that we don't have a claim any more.

Any advice please as we now need the money back urgently for personal reasons.. because we cancelled next day, they have provided nothing for the money. We did not accept their T&Cs but even if we had they are breaking them themselves by not refunding within their stated 14 days for services not provided.

When your daughter placed payment she will have agreed to their T/C.
Who is this company.

You can go the chargeback route. But be aware that while your daughter get a refund upfront. The company has 45 days to reject the claim, get redebited & even if they did not reject, they can still go the legal route to claim the money back.