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  • FIRST POST
    • Lpool21
    • By Lpool21 19th Oct 19, 4:24 PM
    • 16Posts
    • 2Thanks
    Lpool21
    Thomas Cook consequential loss.
    • #1
    • 19th Oct 19, 4:24 PM
    Thomas Cook consequential loss. 19th Oct 19 at 4:24 PM
    Hi guys
    I booked some flights with Thomas Cook for a party of 6 including me,my daughter,my parents and 2 friends on my Barclaycard for this Dec.The approx cost was £3500 and the flights were economy on way out and premium on the return.
    When I heard that Thomas Cook had gone bust I booked the cheapest replacement flights I could find at a total cost of £5500.These flights are economy both ways so less than like for like.
    I applied to Barclaycard under section 75 for the initial £3500 and for £2000 consequential loss for the replacement flights.
    I received a reply today stating that they would refund the full £3500,subject to investigation,but would only refund consequential loss for me and my daughters flight as she is my dependent.
    I donít think this is correct as I solely paid the full amount for both the Thomas Cook flights and the replacement flights.I am the one that has fully suffered the consequential loss and no one else.
    Any help/advice would be very much appreciated
Page 2
    • Terry Towelling
    • By Terry Towelling 21st Oct 19, 9:14 PM
    • 2,144 Posts
    • 1,788 Thanks
    Terry Towelling
    Hi Terry, I'm a bit confused about your radiators example. Unless I'm not understanding properly.
    First of all, if you make a payment of £50 by credit card, you have no protection with the credit card issuer for payments under£100. But if you make a part payment of £100 or over and no matter how you pay the balance - the whole amount is covered by section 75.

    However, using your example, if you only pay £50 by credit card and the balance in cash, and something goes wrong, you can make a claim under the Consumer Rights Act 2015.

    Alternatively, you can make a claim through the Small Claims Court if the claim is under the maximum amount for your country and
    you can recover your costs of doing so if you are successful.

    Both the above examples are not affected by who owns the house, the person who creates the contract is the only claimant.
    Originally posted by Overseer
    My example was couched in the way it was, to make it clear that, because it wasn't just my house, whatever I bought would end up benefitting all the owners, and that those co-owning beneficiaries were not related to me and not my dependents.

    My point was that my claim under S75 would not be scrutinised by the bank in the same way as a travel claim. I would (probably) have no problem getting the claim paid, despite some of it being viewed as a consequential loss that related to people who were neither my family nor my dependents.

    The amount of the credit transaction being under £100 is not an issue - as has been pointed out - if the contract is valued over £100 and less than £30K.

    I concede it was a very contrived example but it was just to illustrate a point.
    • Lpool21
    • By Lpool21 11th Nov 19, 5:31 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    A quick update.
    Barclaycard are sticking to their guns so I have now initiated a complaint with the financial ombudsman.
    • Terry Towelling
    • By Terry Towelling 11th Nov 19, 8:51 PM
    • 2,144 Posts
    • 1,788 Thanks
    Terry Towelling
    A quick update.
    Barclaycard are sticking to their guns so I have now initiated a complaint with the financial ombudsman.
    Originally posted by Lpool21

    Good for you. Keep us posted.
    • Lpool21
    • By Lpool21 11th Nov 19, 9:49 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    thanks.
    will do
    • blueste
    • By blueste 13th Nov 19, 4:08 PM
    • 28 Posts
    • 3 Thanks
    blueste
    Lpool121 is a in a better situation than me! I had 2 return flights booked with TC for next Sept for my wife and myself. After the collapse I re-booked (like for like) with a different airline at an additional cost of £600 and claimed the difference with Halifax Clarity Card. Halifax have refused the claim saying that they are not liable for any consequential losses associated with the companies collapse.

    We were also was due to fly home from Vegas just after the collapse with TC. As a result we were delayed in Vegas by 1.5 days, I claimed the associated costs of being in Vegas with Halifax Clarity, they have refused these costs citing the same above reason!
    • Overseer
    • By Overseer 13th Nov 19, 5:02 PM
    • 15 Posts
    • 6 Thanks
    Overseer
    Hi blueste, I don't see how Halifax can have a different attitude towards your consequential losses as Section 75 applies to the industry and I wouldn't think that individual companies could apply their own rules.
    I was given a Travel Dispute claim form by Barclaycard and quickly received a FULL refund of my unused Thomas Cook flight invoice for myself, my wife AND her sister. Also, a further repayment of the consequential losses for myself and my wife : extra cost for rebooking flights with Jet2. The only refusal to repay was the extra cost of flight rebooking for my sister-in-law as they regarded her as a 3rd party and they say that they do not cover 3rd party consequential losses. I have yet still to see this part of Section 75 rules. If anyone can direct me to that I will be satisfied.
    So I suggest that you look further into your Halifax situation, as it doesn't look right.
    Below, I have copied a claim form I downloaded from Barclaycard just to show you the detail. Note the line which asks :
    *Any other amount that you are claiming for additional expenses incurred: *

    Travel liquidation Claim Form
    Name:
    Account number: (Please quote the card number used for this transaction)
    Company:
    Names of persons due to travel: Relationship to you:
    1
    2
    3
    4
    5
    6
    Please note: the travel insurance premium won’t be reimbursed and any refund claim should be referred to the insurance company, broker or travel agent for advice.
    Date of transaction:
    Total amount paid on your Barclaycard:
    Total amount paid by another method: (cash/cheque/debit card)
    Any amount paid by another credit card:
    Less travel insurance premium:
    Any other amount that you are claiming for additional expenses incurred:

    Total amount you wish to claim:
    Were any of the services received?
    If yes, the value of the service received:
    Checklist for documentation required
    1 Copy holiday invoice/confirmation (please note, without this documentation we may not be able to evaluate your claim).
    2 Letter referring you to your credit card company confirming that the services/holiday will not be provided or any other proof confirming the service will not be provided.
    3 If any amount paid using another credit card, confirmation that you have or have not approached the organisation and their response.
    4 Any other documentation you feel is relevant to support your claim.
    5 Copies of the original airline tickets including, e-ticket or paper ticket.
    If you are unable to return any of the relevant documentation please indicate the reasons why in the box below.
    Signature (main cardholder):
    Date:
    On occasions we may need to contact you by telephone, Monday to Friday, about your query. Please provide your contact details below (if appropriate).
    8am – 12pm, telephone number:
    12pm – 6pm, telephone number:
    6pm – 9pm, telephone number:
    Return completed form
    Travel liquidation form - 3E70
    Please return your completed form, together with the required documents to our FREEPOST address: FREEPOST BARCLAYCARD DISPUTES.
    Barclaycard is a trading name of Barclays Bank UK PLC. Barclays Bank UK PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number: 759676). Registered in England No. 9740322. Registered Office: 1 Churchill Place, London E14 5HP. Barclays Bank UK PLC adheres all such situations.
    Last edited by Overseer; 13-11-2019 at 9:31 PM. Reason: Clarification.
    • Lpool21
    • By Lpool21 13th Nov 19, 5:20 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    Hi guys
    Blueste have you escalated your complaint?In my opinion your claim for added costs should be straight forward.
    Overseer you are in the same situation as me and I have not seen anything anywhere to support Barclaycards position.
    In my case the loss is mine and not the “3rd party’s”I paid for the tickets and I paid to rebook them.
    let’s see what the Ombudsman comes back with.
    • born again
    • By born again 13th Nov 19, 6:27 PM
    • 790 Posts
    • 419 Thanks
    born again
    Hi blueste, I don't see how Halifax can have a different attitude towards your consequential losses as Section 75 applies to the industry and I wouldn't think that individual companies could apply their own rules.
    Originally posted by Overseer
    S75 is a very grey area. Each lender will have their own interpretations on the regulation.
    TBH S75 was set up when credit was taken out on a the likes of hire purchase. Such as Car, sofa etc So it was quite simple when there were issues.
    Not as now where it has been passed to anything over £100 up to £30K
    Which is why you will not find agreement between card providers.
    Even FCA can not provide hard and fast rules to card providers.

    Example, several years ago there was the breast implant scare.
    Many would not payout as husband had bought for wife, or additional card holder had bought them.
    Yet others took the route to simply pay all out, despite many being over the 6 year limit.

    All you can do if not happy with your outcome. Is to raise it as a complaint and see how FOS judge it.
    • blueste
    • By blueste 13th Nov 19, 7:19 PM
    • 28 Posts
    • 3 Thanks
    blueste
    Thank you for all your replies. As of now I have only had a brief verbal confirmation as to why my consequential losses claim(s) have been refused from a complaints manager, I am assured the letter will be with me in a day or two. From what I was told they have refused the claim on the basis that TC terms state that I would not be covered for other losses if TC themselves were still operating but had not provided the service.

    Since they have not asked for or seen my terms of booking with TC it is hard for me to understand where they have found the t+c's for a company no longer operating. I will be taking out a complaint and if necessary escalate to the Ombudsman.
    • 2e0arr
    • By 2e0arr 13th Nov 19, 8:32 PM
    • 592 Posts
    • 328 Thanks
    2e0arr
    A quick update.
    Barclaycard are sticking to their guns so I have now initiated a complaint with the financial ombudsman.
    Originally posted by Lpool21
    well whether you win or lose barclaycard will have to pay the case fee of about i think £550. win or lose you pay nothing
    • eco_warrior
    • By eco_warrior 13th Nov 19, 8:32 PM
    • 552 Posts
    • 244 Thanks
    eco_warrior
    It would be interesting to know on what basis the banks are deciding when to pay out and when not, because they all seem to have differing interpretations. The Consumer Credit Act doesn't mention family, friends or the like, it simply mentions the 'debtor' having the option to hold the creditor liable for losses following a breach of contract.

    So, are the banks exploiting the definition of the word 'debtor', or are they using some part of the Law of Contract to limit the way they will pay out when the beneficiaries of a contract include people other than the person who originally incurred (and still holds) the debt - i.e. they have received a gift?

    The Consumer Credit Act defines a debtor as:-

    That doesn't appear to preclude the person incurring the debt from still being the debtor despite other people benefitting from performance of the contract.

    On a slightly tangential note, if I own a house jointly (and equally) with several friends and I pay £50 by credit card and £950 in cash for radiators to be installed in each of our bedrooms, but it all goes wrong and I have a claim for breach of contract, is the bank going to say, they will give me back the £50 but the rest of my claim is a consequential loss (which is debatable) and therefore any additional payment will only cover repairs in my bedroom, because the people in the other rooms are not family or dependents of me? That would be absurd.
    Originally posted by Terry Towelling
    Would you get a contract with all 4 names on it for radiators? Youíve missed the point a bit Terry.
    • Terry Towelling
    • By Terry Towelling 13th Nov 19, 8:35 PM
    • 2,144 Posts
    • 1,788 Thanks
    Terry Towelling
    Thank you for all your replies. As of now I have only had a brief verbal confirmation as to why my consequential losses claim(s) have been refused from a complaints manager, I am assured the letter will be with me in a day or two. From what I was told they have refused the claim on the basis that TC terms state that I would not be covered for other losses if TC themselves were still operating but had not provided the service.

    Since they have not asked for or seen my terms of booking with TC it is hard for me to understand where they have found the t+c's for a company no longer operating. I will be taking out a complaint and if necessary escalate to the Ombudsman.
    Originally posted by blueste
    I don't understand their view here (emboldened text above). Why would an issuer refer to a loss limitation clause that applied specifically to a situation that doesn't apply? TC are not still operating.

    It is true that a contract can limit liability for losses (although those limitations may be seen as unfair contract terms and are not necessarily enforceable in law).

    It seems the stumbling block in many of these cases is the type of loss. Is the loss a direct loss or a consequential loss. The card companies seem to be declining payment on the basis that consequential losses cannot be paid out for non-relatives/dependents travelling as part of a 'party'.

    My argument would be that these are not consequential losses but direct losses, so the card companies' limitations should not be applied. I have seen it reported that a consequential loss is one that could not reasonably have been foreseen by the paying-party when the contract was taken out. To my mind, anyone could reasonably predict that non-performance of the contract might result in a replacement service having to be purchased - most likely at a different cost. That makes the sort of loss we are talking about here a direct loss and so no limitations applicable to consequential losses should ever be applied.

    I suspect the banks will stick to their line, (knowing they are probably in the wrong) in the hope that cardholders will either accept the position, or only go to FOS and not to court. FOS will most likely make them pay up, but, in that event, the bank will have limited their losses to only those cases that go to FOS. If cases actually went to court, the consequences for the banks would be much worse, because that would lead to a definitive ruling that the whole industry would then be obliged to adhere to going forward.

    All just my opinion, I'm afraid, but I have worked for a card company whose legal department said they'd prefer to pay out (on a minority of cases) either voluntarily or following an FOS ruling because a court ruling could blow a hole in everything.
    • eco_warrior
    • By eco_warrior 13th Nov 19, 8:39 PM
    • 552 Posts
    • 244 Thanks
    eco_warrior
    Hi guys
    I booked some flights with Thomas Cook for a party of 6 including me,my daughter,my parents and 2 friends on my Barclaycard for this Dec.The approx cost was £3500 and the flights were economy on way out and premium on the return.
    When I heard that Thomas Cook had gone bust I booked the cheapest replacement flights I could find at a total cost of £5500.These flights are economy both ways so less than like for like.
    I applied to Barclaycard under section 75 for the initial £3500 and for £2000 consequential loss for the replacement flights.
    I received a reply today stating that they would refund the full £3500,subject to investigation,but would only refund consequential loss for me and my daughters flight as she is my dependent.
    I donít think this is correct as I solely paid the full amount for both the Thomas Cook flights and the replacement flights.I am the one that has fully suffered the consequential loss and no one else.
    Any help/advice would be very much appreciated
    Originally posted by Lpool21
    Iím afraid I would agree with this decision. Or should I say it would be the outcome I would expect based on my own experiences with S75.

    As others have said, some banks have different approaches, especially when it comes to large scale events (Airlines) or sensitive issues (breast implants being a good example as it was health related). Itís likely to be a commercial decision to be more generous with s75 claims rather than stick to a more rigid approach.
    • Terry Towelling
    • By Terry Towelling 13th Nov 19, 9:10 PM
    • 2,144 Posts
    • 1,788 Thanks
    Terry Towelling
    Would you get a contract with all 4 names on it for radiators? Youíve missed the point a bit Terry.
    Originally posted by eco_warrior
    Quite possibly I've missed the point and maybe, even the plot!

    The point I was trying to illustrate (if I can remember that far back) was that if I used my own CC to part-fund central heating for a house that I owned jointly with a bunch of non-related people, that heating system would benefit me (the debtor) and the other non-related house owners. It is akin to me buying flight tickets for me and some other unrelated individuals with a part payment on my CC.

    If there were a breach of contract with my heating system and I submitted a S75 claim, my card company would evaluate it, but wouldn't quibble over the non-card payment part of my claim, despite their own (incorrect) view being that this is a consequential loss which benefits people who aren't related to me.

    If they were to apply the same scrutiny they do to travel claims, they'd refuse to pay out on the portion of my claim that covered the heating in my co-owners rooms.

    I said it was a contrived example, but I couldn't think of another way to illustrate why the card companies are being a) inconsistent in their approach, and b) incorrectly viewing direct losses as consequential losses in order to invoke some odd limitation on their liabilities to non-family members.
    • Terry Towelling
    • By Terry Towelling 13th Nov 19, 9:35 PM
    • 2,144 Posts
    • 1,788 Thanks
    Terry Towelling
    Iím afraid I would agree with this decision. Or should I say it would be the outcome I would expect based on my own experiences with S75.

    As others have said, some banks have different approaches, especially when it comes to large scale events (Airlines) or sensitive issues (breast implants being a good example as it was health related). Itís likely to be a commercial decision to be more generous with s75 claims rather than stick to a more rigid approach.
    Originally posted by eco_warrior
    The trouble is that Barclaycard seem to be interpreting the loss here as a consequential loss and saying that such losses will not be reimbursed unless the party members are dependents of the cardholder.

    FOS case 86 (referred to way back in this thread) clearly rules that this stance is not acceptable to FOS. That case involved the parents of the cardholder (family members, but clearly not dependents) and the issuer was told to pay out.

    It is also debateable that a card issuer should treat the extra cost involved in buying replacement flights as a consequential loss, when other legal resources seem to imply they are direct losses, as they are an easily foreseeable result of a breach of contract.

    Like I said earlier, I suspect the banks are happy to be told by FOS to pay up in the minority of cases that get that far because that is better than (potentially) having their official stance blown out of the water by a court ruling, thereby opening the floodgates to widespread increased pay-outs.
    • born again
    • By born again 13th Nov 19, 9:47 PM
    • 790 Posts
    • 419 Thanks
    born again
    Since they have not asked for or seen my terms of booking with TC it is hard for me to understand where they have found the t+c's for a company no longer operating. I will be taking out a complaint and if necessary escalate to the Ombudsman.
    Originally posted by blueste

    Odd that they did not ask for the T/C as that is pretty standard stuff required. But it could be that given the pre-warning that this was coming. That some for sighted person took a copy. Or like us. One of our team got caught in the Closure and had a copy for reference.
    • blueste
    • By blueste 14th Nov 19, 1:21 PM
    • 28 Posts
    • 3 Thanks
    blueste
    So I have had the letter from Halifax, the exact wording they used to refuse my claim is
    "Thomas Cook's terms and conditions state that for single component bookings, such as flight-only purchases, there is no liability for consequential losses in relation to any arrangement which you book to coincide with that single component"

    My argument will be that my losses are a direct loss due to the collapse, had TC provided the flight(s) I would not have incurred the additional costs.
    • Terry Towelling
    • By Terry Towelling 14th Nov 19, 1:42 PM
    • 2,144 Posts
    • 1,788 Thanks
    Terry Towelling
    I agree with you that your additional costs are a direct loss and not consequential - but that is just my opinion.

    I also suspect Halifax will stick to their line in the hope that you will just give up and accept what they say, whilst, at the same time, secure in the knowledge that if you complain to FOS, they will probably insist you be reimbursed (I'm only guessing, of course) and Halifax will be only too happy to do so at that point, knowing that this is just a one-off and not the result of a court judgement that would open the floodgates.
    • Lpool21
    • By Lpool21 14th Nov 19, 10:59 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    I have been doing some research and again agree with Terry Towelling that rebooking a flight is a direct loss and not consequential.
    The difference between the two does seem to cause confusion in contract law.
    I still cannot find anything regarding consequential loss being limited to dependant relatives anyway.
    i’m sure the card companies are probably implying that the creditor-debtor-supplier relationship doesn’t exist with the other passengers.
    I think that in these grey area cases where people have already suffered stress etc due to the situation the credit card companies should rule more sympathetically but I guess that I’m being naive!!
    • Terry Towelling
    • By Terry Towelling 15th Nov 19, 12:48 PM
    • 2,144 Posts
    • 1,788 Thanks
    Terry Towelling
    It is possible that the banks have decided anything purchased for someone else is a gift (another potential grey area) and therefore not eligible for S75 cover - but, they have adopted a voluntary policy (which will vary from bank to bank) whereby they will pay out when the beneficiaries of those 'gifts' are family members/dependents. Such a voluntary arrangement should limit their exposure and reduce the possibility that a case will go to court and be ruled against them. (All just guesswork on my part, though).
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