Not upheld: Goods and services under S75 complaint against NewDay Ltd

Decision detail

Summary

Mr L purchased a 2019 Ford Transit Custom from a dealership using his NewDay credit card to pay a £3,000 deposit, with the remainder paid by other means. The van had condition issues requiring additional repairs. Mr L brought a Section 75 claim against NewDay, but NewDay declined it on the grounds that no debtor-creditor-supplier agreement existed because the purchase invoice was made out to Mrs L only. The ombudsman upheld NewDay's decision, finding that Mr L was not a party to the contract with the dealership and therefore had no claim against the dealership or NewDay, despite his financial contribution and benefit from the purchase.

The Ombudsman's reasoning

Section 75 of the Consumer Credit Act 1974 requires a debtor-creditor-supplier agreement to exist for a valid claim. This requires the cardholder to be a party to the contract with the supplier. Although Mr L made the deposit payment and benefited from the purchase, he was not a party to the contract with the dealership because the purchase invoice was made out to Mrs L only, who signed as the buyer. Mr L could have insisted on joint buyer status if he wished, but did not. Therefore, Mr L has no claim against the dealership and consequently no claim against NewDay under Section 75. NewDay's decision to decline the claim was therefore fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website