Cancelling transaction on a Credit Card

Question

I have a transaction on my credit card which I dispute with the vendor. (Specifically, charges on a car hire booking which I assert are unwarranted, though I doubt the details are relevant)

Obviously I will take this up with the vendor, but since they're currently closed (and also since I don't remotely trust them at this point), I called the card company to get that payment stopped.

I was under the impression that this was one of the points of a Credit Card - that the bank had control of the payments and was halt any that you dispute until the transaction has been appropriately settled, and further that if a simple agreement wasn't reached then the payment would be cancelled so that the vendor has to take YOU to court to prove the debt, rather than you having to take THEM to court to enforce the refund.

When I called the card company they asserted that this isn't A Thing(TM) - that this isn't a thing that they can or will do.

Are they right? Have I missed something? Do I have to invoke a particular incantation of legal Acts to get them to do this?

Answer 1

The Act you are probably thinking of is Section 75 of the Consumer Credit Act. It applies to amounts between £100 and £30000.

That makes the credit card company jointly liable with the retailer for any consumer right you may have to a refund. But if the credit card company thinks that the transaction is correct, then they will not refund your money. You would have to make a formal complaint, and if that doesn't get you the answer you want, you'd have to appeal to the Financial Ombudsman.

There is also a chargeback scheme, but that's a voluntary system that banks offer. Again, they will only do a chargeback if they think the transaction is incorrect.

There is no magic act that allows you to reverse a transaction that has already gone through, just because you dispute it.

Answer 2

Broadly, you can "dispute" the transaction with your card provider and ask for a chargeback. This isn't an automatic right of cancellation, but they will need to at least look at the dispute and respond. For example, in the circumstances you describe, you might claim that you never authorised the transaction, or that the vendor didn't provide the service you paid for.

If your claim is that you never authorised the transaction, they'll have to take that seriously. However, I think car hire agreements tend to grant quite broad authority to charge costs like damage and fines to your credit card, so you might not win this in the end.

If you claim is that the charge was authorised in theory but unwarranted in the particular circumstances, then your dispute is more about the service being provided. Given that it's a credit card, if the amount was over £100, but less than £30,000, then the credit card company is "jointly and severally" liable with the vendor for providing a service you paid for, so you can definitely involve the card company in the dispute. Even if not, they might be willing to help anyway in the interests of good customer relations.

Either way, if you're not happy with the response from the credit card company, you can go to the Financial Ombudsman. If they rule against you, you could in theory go to court, but probably your case would be quite weak given the Ombudsman didn't agree with it.