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  • Writer's pictureTheo Huckle QC

A cautionary tail from a supposedly careful consumer...

Last year I decided to invest in further solar panels at my home together with batteries.  I found what appeared to be an excellent ‘forward purchase’ deal from a company called ‘Premium Lithium’ which had excellent reviews on Trustpilot.  Of course, laying money out months ahead was a concern, but I specifically agreed with Mr Hurry, the MD, that I would pay a substantial deposit via my Amex card (expressly and agreed with him) in order to obtain the s75 protection, which I did using an Amex payment link sent to me by him.  I paid the balance subsequently by bank transfer.  The company is now in liquidation.   I have 'charged back' the deposit payment itself, but the balance is outstanding. When I raised the s75 claim with Amex, they rejected it because the payment by them was made not direct to PL, the supplier, but via something called ’Shopify’, a third party business services company.  Clearly, Amex have a merchant agreement with them, but not with PL.

I had been aware (℅ Martin Lewis and of course!) that there had previously been issues like this with Paypal payments, but had no idea what ’Shopify’ was or that their involvement could in any way alter the s75 coverage. They had no part in the transaction with me or the supply contract, but simply made the payment to my supplier(and presumably took some administrative charge for doing so or overall charge for providing the payment facility?).  On my Amex statement the entry read 'SP PREMIUM LITHIUM LTD'. (I had no idea what the prefix 'SP' meant and believed I had simply made a payment to the supplier.) I remained the debtor to Amex throughout and PL was my supplier.  The payment was made from Amex to the supplier, albeit (I now understsand) via ‘Shopify’.

In my case, I have been a customer of Amex for 18+ years and a lot of funds have passed through the account over that time.  They nevertheless decline to 'look after' their good customer here.

I now understand (via that the Financial Ombudsman has ruled twice in favour of the consumer in the case of Paypal, and that Zettle(?) is  on record as saying that payments made through them do not affect s75 liability of the card issuer.  ’Sum Up’ appear not to have commented.  I am sure there are other similar services but I am not aware of them, just as with ‘Shopify’, though I shall of course be vigilant in future.

I complained to Amex but they rejected the complaint.  The matter is now with the FOO and I await their determination.

It seems to me that the ability of the card issuers to authorise intermediary companies to take payments from them like this is calculated deliberately to undermine the consumer’s statutory protection and I am struggling to see how it can be permissible or, indeed, lawful, though, as readers will appreciate, my practice is very much not in contract/commercial/consumer law.  The thought of people - trying to follow sensible advice to use credit cards for s75 protection in these financially difficult times - being denied it, and losing money they just can’t afford to lose - whilst the online retailers’ and card companies' profits continue to skyrocket -  is horrendous.

I can, of course, take my own advice and action in my own case, but over the years I have often raised relatively small ‘consumer issues’, despite the disproportionate time often involved, because of a feeling that if someone like me does not stand up against poor market behaviour, how do we expect the elderly (my mum etc.) or vulnerable to be able to be protected.  I do think this situation is quite serious, particularly in a cost of living and energy prices crisis, where many people are going to be minded to try to make similar quite expensive home upgrades to protect against future costs and out of good ‘eco-friendly’ intentions, and with perhaps increased post-Covid risks of business failures.  Here I was actively misled into believing that I was fully protected in making the outlay I did, and I’m sure many other people are or will be similarly misled unless appropriately warned, something that Amex have said in terms neither they - nor the supplier - have any obligation to do.  I for one find that suggestion outrageous as a simple matter of ‘customer care'.  Of course I have numerous lines of claim against the insolvent supplier but they are likely of little use to me.

We are now 7 years on, without any improvement in this situation so far as I am aware. I try to keep up generally, but I was completely oblivious to the problem that Amex and some others seem prepared to out of this.

To protect yourself completely, you need to ensure that the card payment you make is either for the full amount of the purchase of goods or services (though that will only entitle you to chargeback for that full amount if the goods are not delivered or the service fails entirely I think, rather than full contractual remedies against your card issuer for reinstatement/completion etc.) or that it is made ‘direct’ to the supplier with a merchant contract with the card issuer.  Be warned!


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