Not upheld: Goods and services under S75 complaint against Lloyds Bank PLC

Decision detail

Summary

Mr S booked a 29-night holiday apartment for £4,000 using his Lloyds credit card but experienced severe service failures including water supply problems and non-operational lifts. He raised a Section 75 claim with Lloyds, which awarded £1,189.16 initially and then increased to £1,511.94 total (combined with W's £396.54 refund, totalling 63% of booking cost). Mr S sought additional compensation for consequential losses (£2,950 for increased food and car hire costs) and complained that Lloyds should have pursued a chargeback. The ombudsman found Lloyds' handling fair and reasonable, rejecting the additional consequential loss claims as not fully foreseeable or properly mitigated, and finding that a chargeback would not have resulted in a better outcome.

The Ombudsman's reasoning

The ombudsman found that W breached the implied terms of the Consumer Rights Act 2015 by failing to provide services of satisfactory quality. However, the ombudsman concluded that Lloyds' total award of £2,510.48 (63% refund) was fair and proportionate remedy. Regarding consequential losses, the ombudsman found that while some increased food and transport costs were foreseeable, Mr S could not claim the full amounts because: (1) eating at restaurants provided some utility and benefit; (2) some catering costs would have been incurred regardless; (3) Lloyds could not be satisfied the hire car costs were solely for accessing facilities or properly mitigated; and (4) W was not given notice of the arrangements to provide alternatives. The ombudsman also found that pursuing a chargeback would not have resulted in a better outcome, as chargebacks cannot consider consequential losses and W had already adjusted the price.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website