In December 2022, I utilized my Virgin Money credit card to make a £500 payment towards an £18,500 order of insulated concrete blocks for the construction of my self-built house. The remaining amount was transferred via bank transfer.
However, six months later, I discovered that the supplier, Insul Hub, had gone into liquidation, leaving me and other customers with unfulfilled orders. The company cited an inability to meet its obligations.
To address this issue, I filed a section 75 claim with Virgin Money. Unfortunately, after 10 weeks of no response, I contacted them only to learn that my claim had not been assigned to a claims handler, and no timeline was provided for this process. Despite making a formal complaint, I have received no further updates.
It has now been three months, and Virgin Money has been unable or unwilling to provide an estimate for when they will review my claim. In the meantime, I am out of pocket by £18,500, a circumstance I believed the section 75 process would protect me from. I seek your assistance in resolving this matter.
AH, by email
Your case highlights the criticality of using a credit card, especially when purchasing undelivered items from small businesses. By solely relying on bank transfers, you risk losing your entire payment.
Section 75 of the Consumer Credit Act 1974 holds credit card providers jointly liable if a company fails to deliver goods or breaches the contract. To qualify for protection, users only need to spend a minimum of £100 using their credit card, without requiring a full payment. Direct payments to the company (excluding agents) are necessary, with coverage being applicable for total amounts under £30,000.
However, obtaining compensation from banks for such claims can be a lengthy and slow process. Even after forwarding your letter to Virgin Money, it took an additional five weeks for them to process it. Fortunately, the company has now approved your claim and will refund the full amount of £18,500.
Additionally, as an apology for the delayed handling of your complaint, they have offered an extra payment. You are relieved that the matter has been resolved, and you will be reimbursed.
We appreciate your letters; however, we cannot respond individually. You can reach us via email at [email protected] or send a letter to Consumer Champions, Money, the Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number. Submission and publication of all letters are subject to our terms and conditions.
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