Section 75 & Chargeback claim query
RoastUK
Posts: 23 Forumite
in Credit cards
Hi everyone,
I'm hoping that I can find some hope from the good folk on MSE forums.
My partner has had a bathroom renovation completed but unfortunately the work isn't it up to scratch. She has paid £3060 on her credit card and £890 on her debit card.
She applied or the section 75 with Barclaycard and they were happy to refund her the payment until the last minute when they identified that the plumber used a merchant called Pay Leven to accept the payment.
They have said that because the payment went to a 3rd party the chain has been broken. I've read a few articles online and it seems clear that this us a murky area regarding Section 75 claims.
My partner has put a complaint in to the Financial Ombudsmen - they've upheld the original decision so we've escalated it to the last stage, this is where I hope anyone on here can help.
Are there any cases out in the public domain in which a similar scenario (eg a 3rd party merchant involved) has been successful with a refund?
I've come across something from 2006 that says creditors should be liable off there are 3 or 4 party's involved but I'm not sure whether that is relevant with it being 11 years old.
We also contacted Pay Leven and they don't have a procedure but if a complaint was made they would look into it. They wasn't clear on how or what this complaint procedure is though.
We're at the stage of going to the small claims court but the stress and anger this has caused has made us both ill.
Any help is appreciated.
Lastly, my partner has attempted to do a chargeback refund claim with Nationwide but they have refused it that. They say that because we've essentially done a bank transfer to the plumber we're not covered. That's also with the Financial Ombudsmen so we're awaiting a decision on that but we're not hopeful of getting a result with that either.
Thanks for reading, I hope no one has to go through this themselves!
I'm hoping that I can find some hope from the good folk on MSE forums.
My partner has had a bathroom renovation completed but unfortunately the work isn't it up to scratch. She has paid £3060 on her credit card and £890 on her debit card.
She applied or the section 75 with Barclaycard and they were happy to refund her the payment until the last minute when they identified that the plumber used a merchant called Pay Leven to accept the payment.
They have said that because the payment went to a 3rd party the chain has been broken. I've read a few articles online and it seems clear that this us a murky area regarding Section 75 claims.
My partner has put a complaint in to the Financial Ombudsmen - they've upheld the original decision so we've escalated it to the last stage, this is where I hope anyone on here can help.
Are there any cases out in the public domain in which a similar scenario (eg a 3rd party merchant involved) has been successful with a refund?
I've come across something from 2006 that says creditors should be liable off there are 3 or 4 party's involved but I'm not sure whether that is relevant with it being 11 years old.
We also contacted Pay Leven and they don't have a procedure but if a complaint was made they would look into it. They wasn't clear on how or what this complaint procedure is though.
We're at the stage of going to the small claims court but the stress and anger this has caused has made us both ill.
Any help is appreciated.
Lastly, my partner has attempted to do a chargeback refund claim with Nationwide but they have refused it that. They say that because we've essentially done a bank transfer to the plumber we're not covered. That's also with the Financial Ombudsmen so we're awaiting a decision on that but we're not hopeful of getting a result with that either.
Thanks for reading, I hope no one has to go through this themselves!
0
Comments
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Chargebacks for this kind of thing are limited to 120 days from when the service ended and things like bank/money transfers aren’t covered either. I expect both of these reason enough to reject the claim. All banks would investigate the chargeback option first to mitigate their losses, even if you asked for section 75.0
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eco_warrior wrote: »Chargebacks for this kind of thing are limited to 120 days from when the service ended and things like bank/money transfers aren’t covered either. I expect both of these reason enough to reject the claim. All banks would investigate the chargeback option first to mitigate their losses, even if you asked for section 75.
Just to clarify £3060 was paid on the credit card so we've gone down three section 75 route for that. The rest was on the debit card so we've gone through chargeback for that.
We're still within the 120 day timeline as well.
Cheers0 -
This would prevent s.75 from applying but you can do chargebacks on credit card transactions as well so have Barclays pursued that option? If you insisted on going the s.75 route you may have skipped over the better option.0
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This would prevent s.75 from applying but you can do chargebacks on credit card transactions as well so have Barclays pursued that option? If you insisted on going the s.75 route you may have skipped over the better option.
Banks wouldn’t skip the chargeback option (which comes at no cost to them) and go straight to s75. Makes no sense.0 -
Just to clarify £3060 was paid on the credit card so we've gone down three section 75 route for that. The rest was on the debit card so we've gone through chargeback for that.
We're still within the 120 day timeline as well.
Cheers
Sounds like the method of payment is the problem for either option. Hard to see how you’d get by this but worth taking to FOS, you never know.0 -
eco_warrior wrote: »Sounds like the method of payment is the problem for either option. Hard to see how you’d get by this but worth taking to FOS, you never know.
This is the point we was raising, I just find it incredible that the section 75 becomes obsolete because a tradesmen uses a merchant to accept credit card payments.
When we first contacted Barclaycard they advised it was the section 75 action that needed to be taken. I'm under the impression that you can't do a chargeback for a credit card?
Thanks0 -
A chargeback can be done on a credit card.0
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This is the point we was raising, I just find it incredible that the section 75 becomes obsolete because a tradesmen uses a merchant to accept credit card payments.
When we first contacted Barclaycard they advised it was the section 75 action that needed to be taken. I'm under the impression that you can't do a chargeback for a credit card?
Thanks
Using 3rd parties to process payments has always been a killer where Section 75 is concerned. Many people will have what sounds like a valid claim only for it to be ruled out due to no Debtor-Creditor-Supplier link. Its a massive stumbling block.0 -
eco_warrior wrote: »Using 3rd parties to process payments has always been a killer where Section 75 is concerned. Many people will have what sounds like a valid claim only for it to be ruled out due to no Debtor-Creditor-Supplier link. Its a massive stumbling block.
This is what we appear to be experiencing.
This is the infomation that I found online that I interpret as supporting our claim when a third party is involved...
http://www.bailii.org/ew/cases/EWCA/Civ/2006/268.html6. Summary
For these reasons we have reached the conclusion that connected lender liability under section 75 of the Act attaches to all transactions entered into using credit cards issued under consumer credit agreements regulated by the Consumer Credit Act 1974, whether they take place within a three- or four-party structure and whether they are entered into in the United Kingdom or elsewhere. We therefore allow the appeal and dismiss the cross-appeal.
Like I say it is from 2006 but no harm in using it.
Thanks for your replies so far btw.0 -
The key part of S75(1) is "If the debtor under a debtor-creditor-supplier agreement ... has, in relation to a transaction financed by the agreement,"
The 2006 judgment, taking account of developments since 1974, interpreted the three-party DCS structure broadly, allowing application in the case of what it called a "four party" structure, namely: D(cardholder)-merchant acquirer-C(card issuer)-S(merchant).
It was argued by CCs that a "merchant acquirer" is an interloper that could potentially break the DCS chain. The court found that it didn't - they rejected strict interpretation of the "chain". However, note that a merchant acquirer is a bit different to role played by the likes of Paypal, Pay Leven or whatever.
Given the court's willingness to bend S75(1) to take account of modern developments, I believe that if it were tested in court, S75 liability would be found to include payment processors. Indeed I think liability would be found in any situation where consumer credit is provided by a lender through any number of intermediaries provided the individual transaction remains traceable and the route is reasonably instantaneous. Put simply, the intention behind the 1974 Act is to place a lender on the hook where they finance a purchase from a supplier with whom they have a common commercial interest.
Certainly if the OP is refused on the grounds the chain is broken, (and assuming you're not willing to finance an expensive appeal!), I would keep all the documents for a while in case we get a further judgment from a higher court.
It is a failure of parliament not to have updated the legislation and given they haven't, a failure of regulators/consumer bodies not to have brought further test cases in order to clarify the situation. (Perhaps they have, willing to stand corrected.)0
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