A little-known flaw in the Consumer Credit Act may put Jersey shoppers at risk of losing their money if things go wrong.
Under Section 75 of the UK Consumer Credit Act, shoppers who make payments between £100 and £30,000 on a credit card can get their money back if the goods turn out to be faulty, not as described or don’t arrive. The UK law makes the retailer and credit card company jointly liable. Jersey consumers usually benefit from this protection due to terms and conditions reflecting the UK Consumer Credit Act.
However, a little-known loophole revealed by a MoneySavingExpert means that consumers will only be reimbursed if there is a direct link between the customer, their credit card provider and the supplier. If the payment is processed by a third-party company then the protection under Section 75 does not apply.
So, if you bought a concert ticket through an agent on a credit card, you may not be able to get your money back using Section 75 if it doesn’t arrive.
The same may apply if you booked a holiday through a travel agent. However, the travel industry may very well have their own financial protection schemes in place.
You may also not be covered for credit card transactions made through online payment platforms, such as PayPal, because it breaks the chain between customer and supplier. However, if the firm you’re buying from has a “Commercial Entity Agreement” you’ll be able to make a claim under Section 75 even if you use PayPal. PayPal has its own Buyer Protection scheme. This covers online purchases made on eBay and other websites if the item does not arrive or match the seller’s description. Property, vehicles, custom-made items and industrial machinery are among some items that are not guaranteed.
Amazon is another firm where Section 75 may not apply. Shoppers who buy items on a credit card from third-party suppliers on the online marketplace will not be covered. If you buy directly from Amazon then you could make a claim.
Confused, it is not surprising! Trading Standards offers the following advice:
- Know who you are buying from and who will take your payment
- Wherever possible put payments on your credit card
- If you are entitled to protection, you are still covered even if a small proportion, part payment or deposit was paid using your card
- When things go wrong, don’t delay. If you don’t have Section 75 protection you may alternative protection through platform buyer protection schemes, but these are often time limited.
Free confidential consumer advice is available from Trading Standards on 448162 or email email@example.com. You can also drop in, they are in the Central Market under the clock.
Channel Islands Financial Ombudsman
The Channel Islands Financial Ombudsman (CIFO) will commence the resolution of complaints about financial services on 16 November 2015, when its full legal powers are brought into force through the Financial Services Ombudsman (Jersey) Law 2014 (Appointed Day) (No. 3) Act 2015.
CIFO has published the Jersey Fee Scheme and Jersey Levy Scheme, setting out the detail of its funding mechanism. It has also published a consultation paper on a model complaint-handling procedure for financial services providers that can be found https://www.ci-fo.org/cifo-consultations/
The closing date for responses is 30 October 2015.
Three key messages emerged from our survey:
- We must all take personal responsibility for
our financial health;
- We must all research our facts and ask questions to help us make informed decisions and to better understand the bigger picture of what financial health entails – over the short, medium and long term;
- Most importantly we must NEVER put our head in the sand – financial difficulties escalate not diminish!
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