Partially upheld: Goods and services under S75 complaint against Lloyds Bank PLC

Decision detail

Summary

Mr M paid £3,000 via Lloyds credit card in 2020 to building contractor X for kitchen furniture, worktop and dishwasher (repayment of a disputed 2019 transaction). Subsequent installation and remedial works were subject to a separate contract with different payment terms. When defects arose from installation, Mr M claimed remedial costs under Section 75 of the Consumer Credit Act. Lloyds initially suggested it would cover some costs but later declined the claim. The ombudsman found Lloyds' decision technically correct as Section 75 only covers goods/services directly paid for via credit card, and installation was a separate contract. However, Lloyds was found to have made an error in providing misleading information about coverage, creating false expectations over several years, warranting £400 compensation.

The Ombudsman's reasoning

The ombudsman found that Section 75 of the Consumer Credit Act only applies to goods or services directly paid for using the credit card. The £3,000 payment related solely to the supply of kitchen furniture, worktop and dishwasher, as evidenced by the invoice and quotation. The installation and other remedial works were subject to a separate contract with different payment terms (£1,800 plus VAT for fitting), and there was no evidence Mr M's Lloyds credit card was used to pay for these works. Therefore, Lloyds had no liability under Section 75 for defects arising from installation. However, Lloyds made an error in indicating it would cover some remedial costs, creating false expectations over several years, warranting compensation for the distress and inconvenience caused.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website