Not upheld: Goods and services under S75 complaint against Monzo Bank Limited

Decision detail

Summary

Miss S purchased a second-hand car, paying £100 via Monzo Flex credit card and £3,700 via bank transfer. Approximately one year later, she discovered the car had an undisclosed salvage history and could not be sold. She also reported multiple repair issues from the outset. Miss S claimed the dealership M had misrepresented the car's condition and breached the contract by selling an unsatisfactory vehicle, and sought recovery under Section 75 of the Consumer Credit Act. However, the ombudsman found that the £100 card payment was processed by entity A rather than M, which broke the debtor-creditor-supplier agreement required for Section 75 protection. Without evidence that A and M were associates or the same business, no valid Section 75 claim existed. Although Monzo could have explained this issue sooner, the ombudsman found Miss S was not left worse off and did not uphold the complaint.

The Ombudsman's reasoning

For a valid Section 75 claim to exist, there must be a debtor-creditor-supplier (DCS) agreement in place between the lender, borrower, and supplier. The critical issue is that the £100 card payment was processed by entity A, not by M (the actual car dealership). While Miss S intended to pay M and believed she was paying M, the legal requirement for Section 75 protection depends on where the payment actually went. Without evidence that A and M are associates under Section 184 CCA, or that they are the same business operating under different names, no valid DCS agreement existed between Monzo and M. Although Monzo could have communicated this issue to Miss S earlier, it did not leave her in a worse position by investigating both her misrepresentation and breach of contract claims. The ombudsman cannot hold Monzo liable for M's alleged failures when the law does not impose such liability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website