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For all you legal boffs - Section 75 CCA claim


BristolSam
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This isn't related to me personally. A customer pays for a product or service to a retailer via their credit card. The transaction falls within the type covered by the Consumer Credit Act 1974 (CCA). The customer is not happy with the product/service and therefore successfully brings a s75 claim against their credit card (CC) issuer for alleged breach of contract. The CC issuer reimburses the customer for the product and hence remedies the breach.

The retailer disputes this and puts the customer on notice that they intend to take legal action against them for non-payment as the credit card has charged the amount they had to refund the customer, to the retailer.

Now the question is, has the customer breached the contract? Technically they did make the initial payment and therefore fulfilled their obligations under the contract, the credit card issuer are the ones who subsequently recover money from the retailers bank. So has the retailer any scope to bring a claim against the customer, or should they be directing any legal action against their bank?

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Legal action should be taken against the bank providing that the goods in question have been returned.

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Legal action should be taken against the bank providing that the goods in question have been returned.

So the retailer cannot bring a claim against the consumer for non-payment?

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So the retailer cannot bring a claim against the consumer for non-payment?

The consumer has paid; the expectation of payment is then transferred to the credit card company.

Thereafter, upon the monies being refunded, the credit card company are still legally liable to the retailer. I would expect (and I don't speak from experience here) is that the credit card company would ordinarily absorb the loss: i.e. not decrement funds from the retailers account.

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This isn't related to me personally. A customer pays for a product or service to a retailer via their credit card. The transaction falls within the type covered by the Consumer Credit Act 1974 (CCA). The customer is not happy with the product/service and therefore successfully brings a s75 claim against their credit card (CC) issuer for alleged breach of contract. The CC issuer reimburses the customer for the product and hence remedies the breach.

The retailer disputes this and puts the customer on notice that they intend to take legal action against them for non-payment as the credit card has charged the amount they had to refund the customer, to the retailer.

Now the question is, has the customer breached the contract? Technically they did make the initial payment and therefore fulfilled their obligations under the contract, the credit card issuer are the ones who subsequently recover money from the retailers bank. So has the retailer any scope to bring a claim against the customer, or should they be directing any legal action against their bank?

The consumer and card issuer could become co-defendants in legal action but it seems the claimant may have materially breached the contract anyway, hence the dispute. Therefore if a claim is issued, the cc issuer and/or defendant could simply counterclaim.

The outcome of the claims/counterclaims naturally rests with the Judge.

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I would assume the CC issuer would have to satisfy itself that the consumer has suffered a breach of contract/misrep to the extent that they could potentially bring a successful claim against the retailer. Or do they just take the consumers word for it and honour the claim?

I can find surprisingly little information on it, I would have hoped which? and moneysavingexpert might have mentioned to consumers that the third party may bring a county court action against them even if their s75 claim is successful? If this is the case of course.

The consumer has paid; the expectation of payment is then transferred to the credit card company.

Thereafter, upon the monies being refunded, the credit card company are still legally liable to the retailer. I would expect (and I don't speak from experience here) is that the credit card company would ordinarily absorb the loss: i.e. not decrement funds from the retailers account.

But would it be viewed as for example, writing a cheque which at some stage down the lines bounces? The consumer has offered payment but subsequently withdraws it? Or, as you say, the consumer still honoured payment and therefore any claim to be brought against bank/CC issuer.

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So glad I don't do Torts... :)

Haha we didn't cover anything like this when I did torts at uni, probably because it has a real world application!

Edited by BristolSam
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I would assume the CC issuer would have to satisfy itself that the consumer has suffered a breach of contract/misrep to the extent that they could potentially bring a successful claim against the retailer. Or do they just take the consumers word for it and honour the claim?

I can find surprisingly little information on it, I would have hoped which? and moneysavingexpert might have mentioned to consumers that the third party may bring a county court action against them even if their s75 claim is successful? If this is the case of course.

But would it be viewed as for example, writing a cheque which at some stage down the lines bounces? The consumer has offered payment but subsequently withdraws it? Or, as you say, the consumer still honoured payment and therefore any claim to be brought against bank/CC issuer.

Joint and severally liable at the outset of any potential claim. You can't really stop someone making a claim against you (unless there is no real prospect of success etc.)

The point is that both the consumer and the credit card issuer could be cited as joint defendants on a particulars of claim. What happens during the hearing is entirely circumstantial.

Haha we didn't cover anything like this when I did torts at uni, probably because it has a real world application!

This is contract not law of tort whistling.gif

Edited by crash detective
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Joint and severally liable at the outset of any potential claim. You can't really stop someone making a claim against you (unless there is no real prospect of success etc.)

The point is that both the consumer and the credit card issuer could be cited as joint defendants on a particulars of claim. What happens during the hearing is entirely circumstantial.

This is contract not law of tort whistling.gif

Of course you can bring a claim against anyone for anything, the question is has the consumer breached the contract by non-payment. I'd argue they have made payment and the retailers should bring any action against their bank/CC issuer.

And yes, I was just replying to the quoted post :w00t:

I think this belongs better in Help Me, which is where I'll send it.

But first, a message from our lawyers :w00t:

Thanks Vader but its not personal to me or a 'friend'. Its something that came up in discussion at work (legal environment).

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