Not upheld: Goods and services under S75 complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Miss S complained about how VM handled a dispute claim regarding a second-hand car purchased using her VM credit card. The car, supplied in December 2023, developed defects including gearbox issues. VM partially settled the claim but refused full payment, citing the car's age and mileage. Miss S brought the complaint to the FOS, which initially upheld it, but the ombudsman issued a provisional decision not upholding the complaint. The key issue was whether Miss S had a valid Section 75 claim against VM. The ombudsman found that although Miss S was the debtor under the credit agreement and paid towards the car, the contractual agreement for the vehicle was in Mr J's name alone, meaning Miss S lacked the requisite debtor-creditor-supplier agreement necessary for a valid Section 75 claim. The ombudsman's final decision upheld the provisional finding and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman determined that Section 75 of the Consumer Credit Act 1974 only applies when the debtor (Miss S) has entered into a contract with the supplier. Here, the contract was between the supplier and Mr J, not Miss S. Although Miss S paid towards the car and had use of it, this financial contribution and derived benefit do not create the requisite debtor-creditor-supplier agreement necessary for a valid Section 75 claim. The ombudsman noted that chargeback was also unavailable as the claim was raised well outside the 120-day time limit. The ombudsman rejected arguments that Miss S's involvement in the purchase or joint financing created a valid claim, emphasizing that the key requirement is a contractual agreement between Miss S and the supplier.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website