Customer Behaviour

Season ticket holders on strike-hit train lines could be in line for thousands of pounds in compensation after one commuter successfully claimed £2,400 back from his credit card company.

The regular commuter on Southern trains, known only as “Sean”, applied to American Express for a 50% refund claiming non-delivery of the service. But how did he manage it, and does this mean that thousands of other commuters can do the same?

Sean had paid £4,800 for his annual season ticket between Hassocks in West Sussex, and London Bridge, using his American Express Platinum credit card. After it expired he presented evidence to Amex that 50% of his journeys had been disrupted and cancelled, and requested 50% of his money back. He is believed to be the first commuter to use the “section 75” clause of the Consumer Credit Act to make a claim involving regular rail travel. After filing his claim, Amex refunded half his season ticket cost – £2,400.

The section 75 clause makes the credit card provider jointly liable with the retailer – provided that you put at least £100 on the card (up to £30,000) – if the goods or services are not delivered or are found to be faulty. Section 75 gives you the same rights against the card company as you have against the retailer. It was designed to protect consumers buying high value items in the event the supplier ceased trading before the item had been delivered. It also gives consumers rights if the item (or service) turns out to be faulty – there is a breach of contract.

It is, not least because Sean has claimed only half his ticket cost. Most section 75 claims are for the full amount paid out – if they succeed at all.

Martyn James, consumer rights expert and spokesman for complaints site Resolver, said: “This case is very unusual as it’s essentially saying that Southern rail has systemically failed to provide a service. The industry will not be happy with this news but the fact this passenger got his money back is genius.”

Not easy. The credit card companies generally hate these claims, and routinely turn them down, often without good reason. Each section 75 claim is judged on its own merits, and it remains to be seen whether this passenger has simply got lucky, or other similar claims will succeed.

Guardian Money has featured several section 75 cases in recent months that were turned down. If thousands of commuters started inundating their card provider with similar, high value claims, it is likely the shutters would soon come down.

Section 75 claims can often be complex, and staff at the banks often do not understand the rules. The financial ombudsman service has said it receives a significant number of complaints that involve section 75 claims each year. “Cases referred to us often reveal misunderstandings, on the part of credit providers as well as on the part of consumers, about what exactly section 75 covers,” it has said.

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