Section 75

in Credit Cards
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  • Life__Goes__OnLife__Goes__On Forumite
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    eskbanker said:
    That case comes up from time to time on here and has quite a history - my understanding is that the original judgment was in 2004, then the 2006 hearing was at the Court of Appeal, and then it went to the House of Lords in 2007 (who agreed with the appeal court).

    I'm certainly no lawyer but it seems to me that the fourth player in the four-party model under consideration was specifically the merchant acquirer, who effectively has to be involved in credit card transactions, rather than any intermediary, but the judgment doesn't explicitly assert that other models (such as travel agents) are fundamentally different....
    I think that ruling ( four-party model) was an Appeal court ruling,as they didn't take that issue to the HoL
     the other part of the case (Overses transactions), they did appeal to the HoL  and lost.
    It's a pity they didn't appeal to the HoL ( four-party model), and then I feel it would be black & white (no doubt the reason they didn't take it there.

    There is more about the ruling here (but it's a long read)
    https://www.casemine.com/judgement/uk/5a8ff70f60d03e7f57ea6f36
    A passage reads
    6. The first is the development of what may be called the "four-party" structure. This developed out of the use by card issuers of what are called "merchant acquirers" to recruit new suppliers willing to accept the issuer's card. In the classic four-party structure there is interposed between the card issuer and the supplier the merchant acquirer acting as an independent party. There is an agreement between the merchant acquirer and the supplier, under which the supplier undertakes to honour the card and the merchant acquirer undertakes to pay the supplier, and an agreement between the merchant acquirer and the card issuer, under which the merchant acquirer agrees to pay the supplier and the card issuer undertakes to reimburse the merchant acquirer. There is, however, no direct contractual link between the card issuer and the supplier.


    I wish there were more cases to look at

    With Ombudsman's rulings I can see it being different to what the court might say  as they will also look at what is "fair"  but the court can only look at what is legal.
    So they both can be right,  it's unfair to expect a credit company to pay when no direct link,  so the Ombudsman rules that  way,  but legally they should pay,  so the court ruled that way.

    I do have a personal view on this.
    I think if someone challenged a credit card company though the courts, I feel they will pay up,  as they will not want to take the risk of a Supreme Court ruling, think how many millions it will cost them,  much better just to refund each case as that can be done quietly.
     

     
    New User name as MSE gave me a number in my old one.
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  • eskbankereskbanker Forumite
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    Life__Goes__On said:
    I wish there were more cases to look at

    With Ombudsman's rulings I can see it being different to what the court might say  as they will also look at what is "fair"  but the court can only look at what is legal.
    So they both can be right,  it's unfair to expect a credit company to pay when no direct link,  so the Ombudsman rules that  way,  but legally they should pay,  so the court ruled that way. 

    I do have a personal view on this.
    I think if someone challenged a credit card company though the courts, I feel they will pay up,  as they will not want to take the risk of a Supreme Court ruling, think how many millions it will cost them,  much better just to refund each case as that can be done quietly.
    Despite many of the brave words posted on here, I strongly suspect that very few proceed beyond an unfavourable FOS ruling to suing card companies, so we may never know how they'd respond!

    I came across a couple of FOS cases, both of which essentially choose to interpret the 2006 case as relating specifically to the merchant acquirer as the fourth party.

    The ombudsman in https://www.financial-ombudsman.org.uk/files/124134/DRN4888533.pdf explicitly recognises that distinction between legality and fairness, also responding to another multi-party court case from 2005 but ultimately deeming it to be unfair to hold HSBC to it:
    I have read the case, and I do see that it supports Mr W’s position. Other ombudsmen read it when it was decided. While we have regard for what the law says, our statutory duty is to make decisions which we consider to be fair and reasonable. And the view my colleagues took then, and which I take today, is that it would not be fair to HSBC to stretch the ambit of section 75 as far as the court did in that case. Just because there were arrangements between HSBC and the firm which accepted payment, and further arrangements between that firm and the timeshare firm, does not mean it would be fair to say that there were arrangements between HSBC and the timeshare firm such that HSBC should be liable for the timeshare firm’s misrepresentations. That extra step is a step too far. So I don’t think it would be fair and reasonable to construe the section so broadly. 

    https://www.financial-ombudsman.org.uk/files/237597/DRN9992851.pdf is the other one.
  • Life__Goes__OnLife__Goes__On Forumite
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    eskbanker said:
    Despite many of the brave words posted on here, I strongly suspect that very few proceed beyond an unfavourable FOS ruling to suing card companies, so we may never know how they'd respond!
    I agree,  but there must be some people out there, it's just trying to find them.

    New User name as MSE gave me a number in my old one.
    " I am not a number! I am a free man!"

  • Life__Goes__OnLife__Goes__On Forumite
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    I found this interesting reading, and talking how there is even a five party- arrangement because of  
    Bank of Scotland v Alfred Truman

    New User name as MSE gave me a number in my old one.
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  • wizzywig27wizzywig27 Forumite
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    Could you do a chargeback (which seems like the way to go) and if unsuccessful then claim under S75 (legally)?
  • born_againborn_again Forumite
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    Could you do a chargeback (which seems like the way to go) and if unsuccessful then claim under S75 (legally)?
    Yes. If chargeback fails & there is a S75 option it will go that way.
    Life in the slow lane
  • wizzywig27wizzywig27 Forumite
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    Could you do a chargeback (which seems like the way to go) and if unsuccessful then claim under S75 (legally)?
    Yes. If chargeback fails & there is a S75 option it will go that way.
    Thank you. Virgin have announced they won’t be flying until 20th July, our flight is the 27th but they won’t be flying to Vegas. I’ve emailed their exec team asking if my flight will be cancelled and they just told me to go to Loveholidays (who won’t speak to my until two weeks before travel). I can cancel now anyway due to change of airport from Manchester to Heathrow, but I’m not sure how to cancel even if I wanted to as LH are still advising my I’m flying from Manchester!

    its a right mess!
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