Section 75 Consumer Credit Act

Discussion in 'Legal' started by GRDCredit, Sep 5, 2009.

  1. GRDCredit

    GRDCredit UKBF Regular Full Member - Verified Business

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    What do you mean, you don't know what Section 75 says!

    This is the part of the CCA which ensures that if a business goes bust or fails to deliver a service/product the consumer is able to reclaim the money from their Credit Card company (assuming of course that said credit card was used for the original transaction)

    I am talking to an individual at present who - to keep things simple - hired a car and paid a deposit by credit card. The car was returned, no dents or anything and a refund was promised.

    Refund has never been forthcoming but because of promises made the individual has been pursuing the hire company and not involved the credit card company.

    Now he has they are refusing to pay out because 120 days have elapsed.

    I have read as much as I can find on the web about Section 75 and nowhere can I find reference to a time limit for claims.

    Anyone have any knowledge? My own feeling is the credit card company are pulling a fast one and I have advised a conversation with the Financial Ombudsman first thing Monday.
    Posted: Sep 5, 2009 By: GRDCredit Member since: Mar 26, 2009
    #1
  2. maxine

    maxine UKBF Regular Moderator

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    Why doesnt your client do a chargeback?

    Car rental firms I think have different scheme rules in that they are allowed to take a small payment upfront to "ringfence" the transaction and then process for the full amount once the actual price is known.

    Are you sure that the rental agreement is a regulated agreement?
    Posted: Sep 5, 2009 By: maxine Member since: Oct 13, 2007
    #2
  3. maxine

    maxine UKBF Regular Moderator

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    Why doesnt your client do a chargeback?

    Car rental firms I think have different scheme rules in that they are allowed to take a small payment upfront to "ringfence" the transaction and then process for the full amount once the actual price is known.

    Are you sure that the rental agreement is a regulated agreement?
    Posted: Sep 5, 2009 By: maxine Member since: Oct 13, 2007
    #3
  4. toddle2u

    toddle2u UKBF Contributor Free Member

    Posts: 223 Likes: 47
    Is that the credit card company refusing to pay out? If so this will be down to the terms and conditions of the CC company rather than what is stated in the Act. From memory I do not think the Act gives a times scale for chargebacks.

    Also as Maxine has asked is it actually an agreement covered by the CCA 74?
    Posted: Sep 5, 2009 By: toddle2u Member since: Aug 6, 2009
    #4
  5. GRDCredit

    GRDCredit UKBF Regular Full Member - Verified Business

    Posts: 1,946 Likes: 581
    Morning Maxine - sorry not to reply earlier but some of us need our beauty sleep! Thanks for posting twice! that is what happens when you post at 1.49am!!!

    In answer to the chargeback question I have read a bit more now and think there is a time limit on chargebacks and this may be where the 120 days is coming from.


    http://www.lovemoney.com/news/manage-your-finances/why-plastic-really-is-fantastic-2232.aspx

    Why does the rental agreement have to be a regulated agreement? Does Section 75 not apply to all transactions where credit cards are used?

    Myst admit that I am learning as I go along here - fascintating subject!
    Posted: Sep 5, 2009 By: GRDCredit Member since: Mar 26, 2009
    #5
  6. GRDCredit

    GRDCredit UKBF Regular Full Member - Verified Business

    Posts: 1,946 Likes: 581
    I don't think the CCA has anything to do with chargebacks at all. In fact, I don't think the chargeback arrangement has any basis in UK Law at all!

    Found this now which is clearly why my contact has been told about the 120 day rule

    http://www.which.co.uk/advice/your-...back-on-credit-and-visa-debit-cards/index.jsp


    Need to ask the same question to you as asked to Maxine:

    Why does the rental agreement have to be a regulated agreement? Does Section 75 not apply to all transactions where credit cards are used?

    Thanks for reply.
    Posted: Sep 5, 2009 By: GRDCredit Member since: Mar 26, 2009
    #6
  7. toddle2u

    toddle2u UKBF Contributor Free Member

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    If it's an unregulated agreement it is not covered. If you think about it logically the car hire company have not extended any credit, the credit has been extended by the card company. Therefore the chances are that the agreement between the hirer and car company would not be covered by the CCA. It all depends on the wording on the contract. Does it state that 'this is an agreement regularted by the CCA 74'?

    No at credit card transaction are covered by the CCA
    Posted: Sep 5, 2009 By: toddle2u Member since: Aug 6, 2009
    #7
  8. GRDCredit

    GRDCredit UKBF Regular Full Member - Verified Business

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    Thanks again for the reply but I clearly missing something!

    If I order a new computer today by phone and pay for it by credit card the computer firm have not provided me with any credit. However, if they go bust before the computer is delivered I am still going to make a claim through Section 75 or chargeback.

    Sorry - your last sentence has a letter or word missing and makes no sense!!
    Posted: Sep 5, 2009 By: GRDCredit Member since: Mar 26, 2009
    #8
  9. toddle2u

    toddle2u UKBF Contributor Free Member

    Posts: 223 Likes: 47
    Sorry should have read - no not all credit card transactions regulated by CCA.

    If you look at 75 (2) of the CCA 'it says subject to any agreement between them' i.e purchaser and supplier. This means is the agreement specifically worded as to be included within the protection of the CCA 74 or outside of it.

    The example you have give with regards to the computer is different to the issue here. The issue with the car hire problem is down to the t&c's of the contract and what it is regulated by.
    Posted: Sep 5, 2009 By: toddle2u Member since: Aug 6, 2009
    #9
  10. GRDCredit

    GRDCredit UKBF Regular Full Member - Verified Business

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    I love this forum. When I posted the original topic I thought someone might come up with a time limit - not once did I imagine there may not be a case against the credit card company!

    This is where I am getting my information from

    http://www.financial-ombudsman.org.uk/publications/ombudsman-news/31/creditcards-31.htm

    My reading of it is that my 'client' (for want of a better word) has a dispute with the hire company who are a bunch of fraudsters and have not refunded a deposit paid for a car. The Credit Card company are jointly and severally liable for the amount owed. End of! I will feedback what the Ombudsman has to say on Monday morning but in the meantime all opinions gratefully received!
    Posted: Sep 5, 2009 By: GRDCredit Member since: Mar 26, 2009
    #10
  11. toddle2u

    toddle2u UKBF Contributor Free Member

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    Geoff - will be interested to see what the Ombudsman says on this.

    My take on this is that your 'client' may not be afforded protection under s75 as it may be an unregulated agreement outside of the CCA. Without seeing the agreement i cannot say categorically.
    Posted: Sep 5, 2009 By: toddle2u Member since: Aug 6, 2009
    #11
  12. Wild Goose

    Wild Goose UKBF Regular Free Member

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    I think you're on the right tack with jointly and severably liable. My wild stab is that the CCA might apply because there is a consumer credit agreement between your client and his credit card company. The credit card company becomes liable for defects in the goods (or services) supplied by the retailer (or car hire company, in this case) rather as if they, the credit card company, were the supplier of the goods.

    So to test that theory, suppose you bought a computer in Woolworths using your flexible friend, the credit card company assume responsibility (courtesy of s75 CCA) when the computer turns out to be not of merchantable quality and Woollies are no more. In short, the credit card co are put in the shoes of the "retailer". That would make sense, but I wish I knew this for fact rather than logical assumption. The logic could be flawed if consumer hire agreements are automatically subject to CCA legislation.

    As an alternative to that logic, isn't there a voluntary code by which all credit card companies agree to assume the position of the retailer in the event of rogue retailer / deadlock? (whereby you enforce your Sale of Goods rights against the credit card company rather than the "retailer"?). That might be a better option.
    Posted: Sep 5, 2009 By: Wild Goose Member since: Aug 15, 2008
    #12
  13. toddle2u

    toddle2u UKBF Contributor Free Member

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    The problem as I see it with this line of thought is that it is not a question of the goods being of a merchantable quality or faulty but to do with a refund of deposit. Therefore you have to look at the t&c's of the contract to see if the return of the depoit is due. If the contract is specifically outside the CCA you then do not have the protection of s75 CCA.

    This is my logical line of thought but as we know the law isn't often logical.
    Posted: Sep 5, 2009 By: toddle2u Member since: Aug 6, 2009
    #13
  14. maxine

    maxine UKBF Regular Moderator

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    chargeback rules are determined by the merchant agreement and has nothing to do with the contract between the consumer and the supplier

    The contract may or may not be regulated under the terms of CCA ie; what is the period of credit, how many instalments, what value etc.

    The conditions on raising a chargeback is between the end customer (payer) and their bank

    :)
    Posted: Sep 5, 2009 By: maxine Member since: Oct 13, 2007
    #14
  15. mcgovern

    mcgovern UKBF Regular Free Member

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    it maybe there company policy, would statute of limitations would apply?
    Posted: Sep 5, 2009 By: mcgovern Member since: May 17, 2009
    #15
  16. maxine

    maxine UKBF Regular Moderator

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    Chargeback rules take priority over any company policy so the end client needs to get advice from their bank in my opinion :)
    Posted: Sep 5, 2009 By: maxine Member since: Oct 13, 2007
    #16
  17. maxine

    maxine UKBF Regular Moderator

    Posts: 6,562 Likes: 2,010
    I have just glanced at a couple of those articles Geoff. I think what is misleading is that the articles say about how you can raise a chargeback if your contract is reg under CCA when chargeback whether an agreement is regulated or not in certain circumstances such as faulty goods, goods not delivered etc.
    Posted: Sep 5, 2009 By: maxine Member since: Oct 13, 2007
    #17