Not upheld: Section 75 Consumer Credit Act claim rejection; mishandling of claim assessment complaint against Lloyds Bank Plc

Decision detail

Summary

Mr D paid a deposit for windows and doors supplied by building company W using his Lloyds credit card and later complained about unsatisfactory work quality, seeking a refund under Section 75 of the Consumer Credit Act 1974. Lloyds initially indicated it would consider the two order confirmations (Part 1 and Part 2) as separate claims but later concluded they constituted one contract with a total cash price of approximately £109,500, exceeding the £30,000 statutory limit for Section 75 protection. The Ombudsman agreed with Lloyds' assessment that the two parts were intrinsically linked as one overall building project, not separate contracts, and therefore the claim fell outside Section 75 CCA protection. Lloyds was ordered to pay £225 compensation for initially providing incorrect information about separate claim consideration.

The Ombudsman's reasoning

The Ombudsman concluded that the 'single item' under Section 75 CCA refers to the building project as a whole, not individual windows and doors. The evidence showed that W provided an initial estimate for the entire project in December 2023, and both order confirmations were intrinsically linked: Part 1 included the £10,000 installation cost while Part 2 included only goods, suggesting they were parts of one overall contract. The services ran alongside each other, involved the same parties, were created around the same time, and Mr D paid a single 10% deposit on the total estimated cost rather than separate deposits. Both parties' correspondence consistently referred to all works combined rather than as separate contracts. Therefore, the total cash price exceeded £30,000, placing the claim outside Section 75 CCA protection.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website