Section 75 and or Smal Claim

[BCOMDAVE]

Seeking some clarification from a legally knowledgeable or experienced person.

 

In the case of breach of contract under the CRA one is entitled to bring an action via the small claims track.

 

If the purchase qualifies; you are also entitled to claim against the Issuing Bank of the Credit Card under Section 75.

 

So, assuming that one has launched down both routes, is it then 'first past the post' as it were?

 

Say, for example, the Bank complies and pays out. I

assume they would then claim or have title to the faulty goods. (Is that the case?).

 

What would then be the situation with an in progress action against the trader?

Or, what happens to the other action, if for example, the trader suddenly has an epiphany regarding his unreasonableness and coughs up under the CRA?

 

Thanks to any and all who can add to my (and others') understanding on this point.

Edited August 2, 2018 by BCOMDAVE
Typo

[dx100uk]

section 75 1st exhaust that.

[AndyOrch]

Yes exhaust the above first...and then.....

 

You may issue a claim against your credit card issuer. Section 75 of the Consumer Credit Act 1974 allows this because any claim you make would be based on a breach of contract. Section 75 of the Act makes a connected lender jointly and severally liable with any supplier for any breach of contract or mis-representation by the supplier.

 

The provisions apply to any single item to which the supplier has attached a cash price of between £100 and £30,000. Thus your card issuer is potentially liable not only for the value of the card transaction itself but also the value of the item (if greater) and any consequential losses caused to you arising from the breach or misrepresentation.

 

This might be a great deal simpler than issuing a claim in the County Court against the supplier.

 

Essentially, s.75 creates a statutory cause of action in favour of the creditor against the supplier. Thus your card issuer may choose to pursue the retailer once your claim has been submitted to them. You have rejected the purchase, so who owns it is of no consequence to you.

 

It is important to note however, that their liability to you does not turn on any payment they may receive from the original retailer. Since you have rejected the purchase, they need to pay at once.

 

Do not let them string you along, as they will try.

 

Andy

[EssCee]

Presuming this is on the basis of a complaint and not two separate legal actions, you should always approach the trader in the first instance, if they refuse pursue S75 (the creditor may well agree to pay out on economics and/or place pressure on the trader as they did for me with regards to a flooring company without going anywhere near a court action).

 

If in respect of two legal actions, you cannot be placed in a better position or see a double recovery and it may be worth looking to consolidate the proceedings. Under a S75 action you may find (dependent on the value of the claim and economics) that the creditor enjoins the supplier into the proceedings anyway which, if the action for any reason fails could be very costly to you as there are costs from two parties.

 

 

As above the creditor's liability is statutory and does not hinge on the creditor receiving payment from the retailer. It does however hinge upon you proving your case to the satisfaction of a Judge where the claim is contested.

[BCOMDAVE]

Thanks EssCee

 

This relates to a claim against a motor trader as described here. No case is cast iron, but I think the balance of probability is in my favour. I have an independent engineers' report in CPR35 format confirming my claim that the vehicle was likely to be faulty at the time of sale and that they consider it to be the responsibility of the trader.

 

I raised a Section 75 on this with the bank (Halifax/Lloyds)over two months ago now and they have not formally communicated with we yet. They have either ignored me, stalled with they are busy and S75 is a complicated thing to sort out, or blamed technical issues with IT. I have escalated this into a formal complaint with the bank now and just wish they would at least reject my claim (difficult I think with the weight of evidence put forward) so I can move on to the next step.

 

I understand about double dipping so don't expect twice the payout (although all the aggravation and delay makes me think 8% interest is not worth it. assuming a judge would award such in the current economic climate - think it's generally 4% before judgement and statutory thereafter).

 

Sadly, there doesn't seem to be legally binding timescales requiring the bank to respond to a S75.

 

You said, "It does however hinge upon you proving your case to the satisfaction of a Judge where the claim is contested." If the bank don't answer, then they haven't contested, but can I still take action against the bank? and would this be any better than taking action against the trader? Obviously the bank is not (we hope) made of straw.

 

Thanks for your thoughts though.

 

Dave

[EssCee]

Im sure Natwest will have been a little slower to refund me if we were talking about several grand, in my case it was only about £400.00 and they didn't bat an eyelid.

 

 

 

 

You can still raise an action against the bank, but on one claim settling, the other should automatically fail and you could be exposed to costs (unless you can get around that by consolidating the proceedings), it may be worth looking to enjoin the bank into the existing proceedings if the complaint is not upheld or responded to. As an aside, creditors are bound by FOS adjudications - consumers are not.

 

 

If the Bank do not answer your S75 Complaint, sadly it does amount to an admission of liability or acceptance of a claim and as you say there is no time limit on it (save the FOS guidelines) what sticks out for me is that they do not appear to have even given you an update such as we have raised your points with the supplier and are awaiting their comments). S75 imposes a statutory liability but than can only be enforced by litigation where it is not accepted and settled by the creditor. As such, otherwise than pants customer service and cause for complaint as to pre-action conduct (which can then go to costs) in that regard, sadly it doesn't prevent them from filing a defence to Court action and thus contesting proceedings but as you say the bank has the Wonga (perhaps an inappropriate phrase now lol) whereas the trader may not be flush with cash.

 

 

Obviously if you do raise a claim against the bank they will put it in the hands of their solicitors instantly and that is something to be kept in mind, not sure who they would instruct from a their panel but they wont be cheap

[BCOMDAVE]

Success! ...but a loose end

 

An Update:

 

Heard nothing, so I made a formal complaint to Lloyds. They called me back in 24hrs and took all the details etc etc again and said that they would pass the info to the Cards Dispute Team. They then cheekily sent me a letter saying 'thanks for your feedback your complaint is now resolved and you don't need to do anything more.'

 

Sadly, nothing had changed in terms of my S75 claim - still no contact from the Disputes Team.

 

So, after another 14 days, I contacted the FOS and discussed it with them and got the usual spiel about giving the bank 8 weeks in which to respond. I agreed and explained the letter stating all was resolved - then I sent copies of everything to FOS and they opened a claim. They said later the same day that they had contacted Lloyds requesting information about my case.

 

24hrs later I got a phone call from the Lloyds Disputes Team (maybe a coincidence) agreeing to pay the claim in full. No challenges to any of the damages (Insurance, VED, Car Hire, storage charges) I added to the purchase price, save asking for a couple of receipts. Money paid into my account withing 24hrs.

 

I'll also update the actual thread regarding the car.

 

There's just one loose end for me though:

 

The guidance notes for the CRA section 20 says: "...when the right to reject is exercised by the consumer, the trader has a duty to refund the consumer and from this time the consumer must make the goods available for collection by the trader..."

 

The trader didn't want to acknowledge any of his responsibilities. He didn't want to give, nor has he given the refund and while I quoted the above to him early on he hasn't tried to claim the goods (yet?). I have made a "claim" under Section 75 of the CCA against the bank who are jointly liable for the breach of contract by the trader. - which they have paid. The bank is not the trader and not a car dealer. The contract for sale was breached and is "at an end", although I'm not quite sure I fully understand that phase and what happens to the title to the goods. Morally, and I guess legally that reverts to the trader.

 

The Bank have not "bought" the car from me. They have asked me to sell it and pass any funds to them. They obviously would like to mitigate their loses, but what authority do they have in this respect - How does the title transfer to them? Where is this in the CCA?

Is it their property? I have read elsewhere that consumers have been left with all manor of goods following S75 and have become "Involuntary Bailees". Also there is the (faint) possibility that the trader will challenge the clawback when the Bank's solicitors exercise the indemnity clause of 75(2). I understand he has 45 days in which to do this. Although I have nothing from the bank to know when this date may be. He may, (possibly more likely) accept the hit from the bank and ask for the vehicle back. But then what if it's been sold? He would presumably have a claim, but against who, me or the bank?

 

The bank have asked for "any funds", I shouldn't care really, but when I disclose all of the faults, as I am duty bound, and the values is next to nothing and I get a pittance for it, could I be challenged?

 

Any legal brains with opinion or people with past experience in post S75 procedures etc?

 

Thanks for all the support

 

Dave

Edited September 28, 2018 by BCOMDAVE
Typo

[AndyOrch]

https://www.stephens-scown.co.uk/commercial-property/whose-belongings-are-they-anyway-dealing-with-involuntary-bailment/