Credit Card Firms Must Refund Price Of Faulty Goods, After Student's Legal Battle

[interestrateripoff]

http://www.dailymail.co.uk/news/article-1382928/Credit-card-firms-refund-price-faulty-goods-students-legal-battle.html

Shoppers will be able to claim refunds on faulty goods, such as lap-tops and TVs, direct from their bank if they make the purchase with a credit card.

The details of the little-known rule have emerged in a decision from the consumer watchdog, the Financial Ombudsman Service (FOS).

Historically, the Sale of Goods Act has given consumers the right to pursue a retailer for a refund, repair or replacement if a product turns out to be faulty.

..........

However, the FOS says the protection provided by a separate law, Section 75 of the Consumer Credit Act, could provide a more simple solution.

It states that where a purchase has been made with a credit card, the card provider, generally a bank, is also liable along with the retailer.

I wonder how the banks will react to this news that they are now liable for issuing refunds for faulty goods? Is this already factored into the cost of credit cards? Although you also have this right if you use a Visa debit card, which comes with the same protection as it's credit card cousin. Luckily the banks have been issuing everyone with a Visa debit card, looks like they are looking after the consumer after all....

[porca misèria]

I wonder how the banks will react to this news that they are now liable for issuing refunds for faulty goods? Is this already factored into the cost of credit cards? Although you also have this right if you use a Visa debit card, which comes with the same protection as it's credit card cousin. Luckily the banks have been issuing everyone with a Visa debit card, looks like they are looking after the consumer after all....

This is a stupid and damaging law. The net effect is to put gratuitous obstacles and costs in the way of legitimate smaller/newer businesses accepting payment by creditcard.

[Sparkey]

This has always been the case. Not sure why the Daily Mail is making it appear that it is a recent development. Section 75 means that the retailer and credit provider are jointly liable if the product purchased contravenes any consumer legislation (Sale of goods act etc) by being faulty/not as described etc...

This applies only to accounts which are subject to the Consumer Credit act and generally for purchases over £100. This means that items purchased with credit cards/ Hire Purchase agreements and store cards generally qualify. It does not apply to debit cards, however, since these are not a form of credit. When using a debit card there are other schemes (such as Visa chargeback), though these are not usually as comprehensive as Section 75.

Another caveat is that it only applies where the credit card was debited by the retailer directly. In circumstances where a 3rd party took payment on behalf of the retailer (e.g. travel agents, paypal etc...) then section 75 does not apply.

In short - if you want an additional level of protection when buying goods, always use a credit card (but pay it off immediately to avoid any interest accruing!)

[erranta]

This is a stupid and damaging law. The net effect is to put gratuitous obstacles and costs in the way of legitimate smaller/newer businesses accepting payment by creditcard.

Can you explain why? Cos shops have to replace faulty goods up to one year, after that for tv's, washing machines etc they are covered by the manufacturer under 'fit for purpose' ie they are expected to last a number of years without major faults occuring.

Many businesses are twats who tell their customers to contact the manufacturer after the first month cos people don't read up about their rights - the manufacturer then tells customer to contact shop first.

Last resort to cut the merry-go-round by retailer - manufacturer is short circuit them & claim money back thru your card.

I still think anyone who pays by credit card should pay the full costs of running it to avoid the 'hidden' bank tax on society thru retailers adding percentage to everything to cover cost of bank card use to the retailer!

If you pay by cash you still pay an Xtra 3-8% for all the goods you purchase!

It's a cozy relationship between retailer-bank, cos when customer doesn't use credit card they get to keep the Xtra profit margin (which is why 'they' keep very quiet about it and the customers complain about rip-off Britain prices!)

Edited May 3, 2011 by erranta

[frenchy]

you sure?

I think he is right, heard this from financial guy on radio 4 a few weeks back, this would make sense, in France where all cards are essentially debit cards (although called Carte de Credit) you get full protection with VISA.

[Guest sillybear2]

Wonderful, forgive me whilst I hurl this notebook off the top of SB2 towers, the shift key has a slight scratch on it.

[tim123]

What determines the expected lifespan of goods?

The (relative) purchase price!

tim

[sun n sea]

The judge hearing the case.....

English law is all about reasonableness..... have you been reasonable in how you've operated & maintained the goods... has the manufacturer been reasonable in ensuring that the goods were of merchantable quality and fit for purpose?

The judge will sit there and listen to both sides and then decide who has been reasonable and who has not... if you've never bothered to maintain or clean the product in accordance with the manufacturers operating instructions it's unreasonable to expect the manufacturer to foot the bill.

[planit]

This doesn't cost the banks very much. They only lose money if the retailler goes out of business.

When retaillers sign up to accept credit cards they are signing to say the banks can do what they want prety much. If a bank issues a customer with a refund they will automatically remove the money from the retaillers bank account. The bank makes sure that they don't lose out.

I am not saying that the banks will refund a consumer their money easily but I am saying that if they do they will not lose out. If a retailler goes out of business though they can end up losing a lot of money.

[porca misèria]

This doesn't cost the banks very much. They only lose money if the retailler goes out of business.

... which raises the risk to the bank of signing up new businesses ...

... which in turn heaps hurdles and extra costs on newer and smaller businesses ...

It may be just one of many straws on the camel's back, but which is the last?

[tinker]

This has been the case for a while.

I had a battle with the retailer and manufacturer (blind alley, not interested) over a washing machine that failed just out of warranty but having had little use. I argued 'fit for purpose'. The retailer during this time went bust / re-emerged as something else.

The battle went on and eventually the credit card company were involved, and refunded the cost of said washing machine... which I spent on beer ( only kidding). The credit card company were very good about it, actually.

The manufacturer was Servis who went bust some time later - something to do with making rubbish products.