Not upheld: section 75 claim handling and chargeback eligibility complaint against American Express Services Europe Limited (trading as American Express)

Decision detail

Summary

Mr J purchased flights via credit card from online travel agent T and suffered suitcase damage caused by the airline. He requested Amex pursue a section 75 claim against T for breach of contract and consequential losses. Amex rejected the claim, stating T had fulfilled its obligations and the airline was responsible. The ombudsman upheld Amex's decision, finding that T's contractual role was limited to booking flights and arranging a carriage contract with the airline, not guaranteeing the airline's performance. Since the airline, not T, was responsible for baggage handling, T did not breach its contract, and therefore no valid section 75 claim existed.

The Ombudsman's reasoning

The ombudsman determined that for a valid section 75 claim, a Debtor-Creditor-Supplier agreement must exist between the debtor, creditor, and supplier. Here, T's role was limited to booking flights and arranging a contract of carriage with the airline. T's terms and conditions made clear that T was not responsible for the performance of the flights themselves, and that customers were subject to the airline's terms and conditions. Since the airline, not T, was responsible for baggage handling and the damage occurred during the airline's performance, T did not breach its contract with Mr J. Therefore, the DCS agreement was broken and no valid section 75 claim existed. Amex was not unfair in rejecting the claim, and chargeback rules do not cover consequential losses.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website