Section 75 Claim - Consumer Credit Act 1974 (as amended)

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Well what I have suggested does not mean going back to the institution, the Ombudsman will be the intermediary in this case. However if you feel like you want to bring a claim and submit it to Amex you will need to have something concrete and if they reject it then you go down the Ombudsman route anyway to determine whether you have a case or not. Or alternatively you go to court with potentially huge legal fees if your not successful.

If you however contacted the Ombudsman first, you will then have a decision that you could rely on at a later stage if you did challenge Amex's decision by going to the Ombudsman which already says whether or not the agreement is exempt - Does that make sense?

R0b. Thanks for that - I have taken several hours to draft up a submission to the FOS, asking the FOS to contact the institution to clarify the Institutions position on the applicability (or otherwise) of the CCA 1974 to the T&Cs. I will see what the FOS say (although based on other FOS related posts on legalbeagles, it doesn't sound like the FOS always do a great job?)

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

R0b. This is much appreciated as I see the FOS will probably need about 3 to 5 months to resolve, so your advice to start the FOS now is much appreciated.

Hopefully this will give a useful FOS result in a few months when the s 75 claim is well under way.

I presume you see no harm in starting the s 75 claim with Amex UK right now?

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

The FCA does not investigate individual complaints and will refer you to the FOS. If you wish to go down the FOS route before you submit your s.75 claim, then you need to do it sooner rather than later.
A s.75 claim will obviously avoid the legal expenses of court but you also need to have a valid and reasonable claim, which means having reasonable prospects of success if it did go to court.

In terms of the timetable: is it realistic to target having a section 75 claim and the FOS opinion - if starting now in parallel - completed by the end of August 2016? That's about 4 months.

I am trying to find ways to avoid this becoming a protracted process, as I suspect a s 75 claim could take 6 months and an FOS process could take 6 months!

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Well potentially yes, it may be worth firing it off to the Ombudsman and saying something such as you believe that the agreement is bound by the CCA however the institution argues otherwise however has given no explanation as to which part of the exemption it relies upon. You believe it falls within the CCA because the agreement spans 2 years with 6 payments in total. this contravenes the exemption where the fixed sum must be paid in no more than 4 instalments over a period of 12 months. You have attempted to obtain their reason behind this but they are refusing to correspond.

Send a copy of the terms and see what they say. The Ombudsman may write to them and ask them to explain their rationale which of course will be explained to you by the Ombudsman and just make sure that they put it in writing which could be used as a form of evidence. I presume the institution's argument will be that the agreement spans 2 years but that as each year is invoiced separately they are relying on the exemption meaning that the each year is separate. Otherwise it will fall into the CCA and remit of the Ombudsman.

It may or may not work or the Ombudsman may say it believes that the institution is exempt for whatever reasons and then again you could possibly use that as a claim under s.75

R0b. Thank you for this. I read and re-read this post carefully and drafted a submission in a full day to the FOS accordingly. It is much appreciated and thank you for the detailed thoughts and insights. The more I think about it, the more involving the FOS makes a lot of sense.

Do you have any guidance on what to expect from the FOS now in terms of next steps and responses?

As the FCA register is a little confusing on the historic consumer credit licences that the institution held, I have e-mailed the general helpline at the FCA to ask them to clarify what historic OFT Consumer Credit licences they held.

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Thanks.

I can see your predicament, it's not very clear cut is it?

Given that this is a lot of money I think you should consider getting some formal advice from a solicitor who specialises in CCA, not just on the £30k issue but whether you have a valid claim in respect of the misrepresentation and standard of the course in any event.

Thanks EXC. The challenge is also proving the breach of contract and misrepresentation. The CMA publishes this document with extensive points on violations of consumer law https://www.gov.uk/government/upload...nsumer_law.pdf

The challenge is matching up the examples to the evidence and presenting this as a prima facie case.

Do you have any suggestions on the best way to actually demonstrate to the card company "documentary evidence"? It is not going to be a possible to get an "independent report" on the situation, but I can try to provide as clear and hard factual evidence as possible.

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

The FCA does not investigate individual complaints and will refer you to the FOS. If you wish to go down the FOS route before you submit your s.75 claim, then you need to do it sooner rather than later.
A s.75 claim will obviously avoid the legal expenses of court but you also need to have a valid and reasonable claim, which means having reasonable prospects of success if it did go to court.

The following piece on the Moneysupermarket forum is quite interesting - the last post - http://forums.moneysavingexpert.com/...955.1460615659

"When is a single purchase not a single purchase?

• 16th Feb 12, 11:41 AM

I purchased a set of 6 dining chairs (£372), they are not available individually - the smallest quantity you can buy is a pair of chairs for £139. The company itemised the invoice (presumably for accounting purposes) and Barclaycard have used this itemisation to not agree a Section 75. The Financial Ombudsman Service initially agreed that Section 75 of the Consumer Credit Act applied in this instance but upon review informed me yesterday that they have reversed this decision because of the itemisation of the invoice.

If someone purchased a 3 piece suite for £297 and the seller itemised the invoice so that the chairs were £99 each and the sofa was £99 and the suite was faulty does this mean that the consumer is not protected by Section 75? The consumer purchased a 3 piece suite not 3 individual items. It seems grossly unfair to me when it is obviously one single transaction.

How do I fight this unfair ruling? "

This ruling, if FOS precedent, seems like it could be helpful. I purchased an Education Programme (arguably the "whole thing" in one go) that is over £30k in total value, but invoiced in parts: Year 1 and Year 2. It is itemised accordingly. Each year is below £30k. My section 75 claim relates just to Year 1 (I cancelled and never paid Year 2, so there's no basis for a claim on Year 2).

Thoughts anyone?

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

There are some FOS sec 75 case studies, one or two of which cover the £30k limit issue http://www.financial-ombudsman.org.u...mer-credit.htm

Can you post up a copy of the contract, particulary anything that defines the duration/cost of it?

Thanks. I did not realise that all the FOS decisions are published online and in a database (on an anonmyised basis)!

http://www.ombudsman-decisions.org.uk/

[R0b]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

HI Dossier, Money Saving Expert are right. If the transaction is not £100 or more you cannot claim under s.75 although I think in your case this isn't the issue is it as you have made payments over £100 haven't you? The question is whether or not it falls within the remit of the FCA and you can make a s.75 claim based on the 2 year invoices.

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Seems this case has difficulties, while i can see the argument of each year being a discrete part of the contract, i think careful consideration is needed of the provision of s75.

Banks in cases such as lankbanking cases which i have dealt with have tried to argue that because the client purchased 4 plots at £25k per plot then the price is over £100k and thus outside of the remit of s75. That argument is easily countered, this one however, well im not sure to be fair.

To me, it seems that the first year and second year are very much joint at the hip, you couldnt undertake a second year of the course without doing the first year, nor im sure would you be able to get the qualification at the end of the second year without studying the first year too. At least thats my thought on that aspect.

You would need to show that the first year and second year both stand on their own feet to pull this into s75

@pt2537 is this the 4 plots of land case you were referring to? http://www.ombudsman-decisions.org.u...x?FileID=69861

The FOS said:

"Section 75 states that the cash price value of any single item purchased must be over £100

and under £30,000. I have considered all the available evidence and I broadly agree with our

adjudicator’s position. I accept the collective purchase price for two plots of land amounts to

£38,952. However each plot is given its own reference on the documentation provided by the

supplier and is completely separate from each other as shown on the map. I am in no doubt

that the individual costs of those two plots is under £30,000 each and therefore this brings

Mrs N’s transactions within the scope of section 75"

There is also a two-plots case, which could be helpful:

http://www.ombudsman-decisions.org.u...x?FileID=70583

"Section 75 states that the cash price value of any single item purchased must be over £100
and under £30,000. I have considered all the available evidence and I broadly agree with our
adjudicator’s position. I accept John Lewis’s point that the collective purchase price for two
plots of land amounts to £30,209 (although Mr N only paid £29,709). However each plot is
given its own reference and I am satisfied that each is an individual plot. I am in no doubt
that the individual costs of those two plots is under £30,000 each, as demonstrated by the
evidence, and therefore this brings Mr N’s transactions within the scope of section 75"

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

HI Dossier, Money Saving Expert are right. If the transaction is not £100 or more you cannot claim under s.75 although I think in your case this isn't the issue is it as you have made payments over £100 haven't you? The question is whether or not it falls within the remit of the FCA and you can make a s.75 claim based on the 2 year invoices.

Thanks: in that last MSE post, there is a situation where someone purchased a set of 6 chairs for well over £300, but the invoice listed items individually - which were each £100 and therefore it was BELOW the minimum threshold for a Section 75 claim.

In my case, I have a packaged product (the two year education programme) that is over £30,000 in total, but under £30,000 as each year is listed on a separate invoice at under £30k each year. Using the same logic, this appears to put it WITHIN the scope of Section 75's £100 - £30,000 range.

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Here is an example from the FOS Precedents database:

http://www.ombudsman-decisions.org.u...x?FileID=38392

Background:
"Mrs A bought four new dining chairs from a retailer. She paid a total of £300 using her
MBNA credit card, but when the chairs were delivered they were defective. Mrs A
complained to the retailer. Eventually, two of its representatives came to her home. They
said that they would not replace the defective chairs, but would simply clean them and bring
them back, and she would not notice the difference."

Ombudsman:
"In particular, section 75 does not apply so far as a claim relates to any single item to which
the supplier has attached a cash price not exceeding £100. In this case, the total order price
was £300. However, the retailer’s invoice shows that each chair was individually priced (after
discount) at £75. So because the order was made up of a number of items each priced at
less than £100, section 75 does not apply."

In this example, the itemisation of the invoicing pushed the claim BELOW the £100 minimum threshold.

In my case, I would cite the same basis: the total price is well above £30,000, but the itemisation of the invoicing (two separate years, two separate invoices) pushes the claim BELOW £30,000 and therefore into Section 75 territory (i.e. between £100 and £30,000).

Comments welcome!

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Can I also take advice from this thread on the basis of the section 75 claim for misrepresentation?

I note from the FOS that successful claims under misrepresentation have to demonstrate:
"Where a party is engaged in the business of selling goods or services, any statement, no
matter how innocent, can create liability if the statement concerns the character or quality of
a product or service and the statement is not true. The statement must be one of fact. This
does not include the glowing opinions of a salesman in the course of a sales pitch.
For there to be misrepresentation:
 someone must make a false representation that must be false at the time of the
transaction, and remain false;
 the misrepresentation is "material to the transaction," which means it must be about an
important element of the transaction at hand;
 the other party must substantially rely on the misrepresentation, meaning if the other
party knew the true position, they would not go through with the transaction. If the buyer,
for instance, would have bought the item regardless of what was said about it, the
misrepresentation may not count. They must substantially rely on the falsehood."

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

HI Dossier, Money Saving Expert are right. If the transaction is not £100 or more you cannot claim under s.75 although I think in your case this isn't the issue is it as you have made payments over £100 haven't you? The question is whether or not it falls within the remit of the FCA and you can make a s.75 claim based on the 2 year invoices.

There is an FOS case on land purchases, where the FOS says:

"Section 75 states that the cash price value of any single item purchased must be over £100
and under £30,000. I have considered all the available evidence and I broadly agree with our
adjudicator’s position. I accept the collective purchase price for two plots of land amounts to
£38,952. However each plot is given its own reference on the documentation provided by the
supplier and is completely separate from each other as shown on the map. I am in no doubt
that the individual costs of those two plots is under £30,000 each and therefore this brings
Mrs N’s transactions within the scope of section 75"

So in this instance, again, separate items (land listed separately) pushes it within the £100 - £30k scope of s. 75

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

The FCA does not investigate individual complaints and will refer you to the FOS. If you wish to go down the FOS route before you submit your s.75 claim, then you need to do it sooner rather than later.
A s.75 claim will obviously avoid the legal expenses of court but you also need to have a valid and reasonable claim, which means having reasonable prospects of success if it did go to court.

Thanks R0b. What are the steps in a FOS process and how long does it take? Thank you

[R0b]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Well as long as the complaint has been over 8 weeks and/or you have received a final decision letter or sorts then you just go onto the FOS website and download the word complaint document and complete as required. It is probably best to set out a timeline of events, including that you believe the agreement falls within the CCA and then await the response from the FOS. Bear in mind that people from the FOS are not legally trained but will probably have some knowledge of s.75 so always best to signpost them in the right direction just in case.