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  • Writer's pictureTheo Huckle QC

A cautionary tail from a supposedly careful consumer...RESULT!

With some diffidence about posting on 'the personal' I posted this in April about my lovely experience of making a s75 claim to Amex for repayment of sums I'd paid to a solar supplier last year who then went 'bust' without supplying the system.

The claim to Amex was rejected because the Amex payment (and only the payment) was effected via a third party business services company called 'Shopify' (of whose existence I was at the time unaware).

Amex claimed that this interrupted the 'debtor-creditor-supplier' relationships required by the Consumer Credit Act so that my s75 protection was lost.

I pointed out to them that if they were right what it meant was that they had knowingly deprived me - their customer of many years - of the statutory protection by permitting the supplier (without a merchant agreement with them) to process Amex payments via Shopify (with whom they must have entered into a merchant agreement or similar) without even any warning to me. They were not required to warn me, they said, and neither was the supplier (with whom I had expressly agreed the card payment arrangements in order to obtain the s75 protection!).

They rejected my application under s75 and then my complaint (required before a referral to the Financial Ombudsman's Service 'FOS' could be made).

I am pleased to report that the FOS investigator completely agreed with me that this payment mechanism did not alter the s75 protection for the consumer, and that this was the firm position of the FO in these situations. Indeed, there had several years ago been some cases concerning similar credit card payments via Paypal in which the FO had ruled in favour of the consumer.

Amex conceded the initial position of the FOS. I have had all of the money back now.

I have 2 remaining concerns which it may be worth bearing in mind:

  • Think of all of those people who may have tried to make claims and been 'fobbed off' in this way but who do not have the ability (for whatever reason) to pursue the matter further via the FOS. My complaint to the FOS was resolved on the basis of the initial investigation without a formal ruling from the Financial Ombudsman so will not be published except by me (and you).

  • The basis upon which the FOS recommended 'fair and resasonable' compensation to me is suspect. At one and the same time the investigator suggested to me that I was entitled to be put in the position I would have been if the supplier had not breached the contract (correct ✔️ - I agreed) but that their recommendation to Amex would be to put me in the position I would have been had I never entered the supply contract (wrong✖️ - I disagreed). I don't understand how the FOS's position can be that s75 applied so that Amex are by statute put in the same position as to contractual remedy to me as the supplier, yet not say that they are bound to compensate me sufficiently to have the system installed at current costs (which are obviously considerably greater than when the contract was entered - I had provided 2 quotes to Amex when I applied). I am very unclear as to the basis of an assessment of 'fair and resonable' by FOS if it is not the contractual s75 remedy as against the supplier, as the statute provides. Or am I missing something? Ha! Anyway, I confirmed with the FOS that their determination and direction for repayment to Amex does not alter my statutory rights ('though the court may take into account the decision of the FOS') and I am considering further options... Anyway, pleased to have the money back if not the system! Yet.

Please spread the word about this decision in favour of s75 coverage despite the involvement of a third party payment processor!


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