Not upheld: section 75 Consumer Credit Act claim rejection complaint against American Express Services Europe Limited (AESEL)

Decision detail

Summary

Ms F booked a 23-day guided tour and left after 3 days due to alleged bullying by other participants, discrimination, and inadequate support from the tour leader. She claimed £1,453 plus £1,000 for loss of enjoyment under section 75 of the Consumer Credit Act, which AESEL rejected as insufficient evidence of breach of contract. Although Ms F's travel insurance claim was upheld on curtailment grounds, the ombudsman found that AESEL reasonably concluded the evidence did not establish a clear breach of the travel company's contract, as the tour leader appeared to have made reasonable attempts to address the situation through mediation and room changes. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities standard given incomplete and inconclusive evidence. For a section 75 claim to succeed, there must be a debtor-creditor-supplier agreement (satisfied) and a clear breach of contract or misrepresentation by the supplier. While the travel company's terms stated everyone has the right to feel safe and that bullying would not be tolerated, the evidence did not sufficiently demonstrate that the tour leader's attempts to mediate and arrange room changes amounted to a breach of contract. The tour leader appeared to have made reasonable attempts to address the situation, and the travel company's decision that the evidence was insufficient to demonstrate a breach was reasonable. The fact that travel insurance upheld the claim on different criteria does not affect the section 75 analysis. AESEL's handling of the claim was not materially wrong.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website