Some Section 75 good news

My last update discussed payments by credit cards and the extra protection this gives to the consumer. One of our ongoing cases I mentioned has now been resolved to the benefit, yes the benefit, of the car dealer.
As a reminder, credit card companies can give a full refund to customers who use a credit card to purchase a car for a value between £100 and £30,000. The amount of the refund is then claimed back from the dealer and so it’s fair to say that credit card companies don’t really need to put much effort into their decision making as they just pass any  loss onto the dealer.
In this latest case, a customer bought a vehicle and a part payment was made by a third party on their credit card. The customer was unhappy with the vehicle and the third party asked the credit card company for a Section 75 refund. Unbelievably, the credit card company gave their customer a refund of the full purchase price of the car. I say unbelievably as under Section 75 of the Consumer Credit Act there has to be what is known as a ‘creditor-debtor-supplier’ agreement. This essentially means that the person buying the goods is also the person named on the credit card – clearly not the case here.
After submitting our legal arguments to the credit card company, they accepted our position and agreed to not pursue our dealer for the amount they paid out. So, the credit card company take the hit of the loss and our dealer gets the car (which the customer handed back to get the refund) and the money from the original sale. All in all, not a bad day at the office.

Authors: Nona Bowkis

Published: 21 Nov 2014


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