Customers who have filed a Section 75 claim with their bank or credit card provider can wait until next year for a refund, This is Money can be disclosed.
An HSBC customer – who simply wants to be named Ray – filed a claim in August 2020 after a New York holiday scheduled for April 2020 was canceled due to the pandemic. However, he is facing a long delay in paying compensation.
He’s just one of thousands who have filed claims with banks reporting an increase in Section 75 claims over the past year because it allows travelers to get refunds for canceled flights.
This appears to have caused a backlog – particularly at HSBC.
HSBC told a customer it may have to wait until the end of 2022 for a refund
In Ray’s case, Jetline, his holiday operator, said it would not pay, so he and his wife claimed their own credit cards, with £2,058 on his HSBC card and £1,165 on his wife’s Tesco card.
Initially Tesco told Ray it would give them a full refund, although only £1,165 had been paid, but as it stands, only that amount was returned, in August 2020.
This was when he opened a Section 75 refund claim on his HSBC credit card for the rest of the holiday covered by that card.
Section 75 of the Consumer Credit Act of 1974 gives protection to credit card users if they suffer breach of contract or misrepresentation when purchasing goods.
It removes the risk of people getting into debt for goods or services that were never received, were defective, or were not as described.
Section 75 provides protection for items or services from £100 to £30,000 in value, at least part of which was made from the purchase, such as a deposit, using a credit card – such as Ray holiday.
However, he hadn’t heard an update by Christmas, so he called HSBC.
He claims that the bank told him there were “no viable timelines for Section 75 claims” and that it currently takes between 6 and 12 months to review cases.
She added that this timeframe relates to the time it takes to complete the initial case review, not to resolve the case.
One vacationer’s trip to New York was canceled and they waited nearly a year for a refund
This means he will likely have to wait until the end of 2022 for a holiday that was due to start in April 2020 – nearly two years of waiting.
This is the money HSBC has been contacted to find out why the refund process is taking so long.
An HSBC spokesperson said: ‘Like most financial services providers, we have faced an unprecedented increase in chargeback volumes and Section 75 claims due to the Covid-19 pandemic.
“We regret any delays customers experienced as a result of this and are currently making improvements to streamline the claims process.”
Fortunately, he has now received a full refund plus £100 compensation for his troubles which he donated to charity.
This is Money has contacted several major banks to find out how long they take to process claims.
HSBC has acknowledged a backlog of chargebacks and Clause 75 claims it needs to be addressed
Santander said it reviews all Section 75 claims within eight weeks of receiving a claim and is currently able to review the majority of claims within one to two weeks.
Barclays added that this can be done within two weeks but in some cases, but there are circumstances that take longer.
Lloyd’s said that while each claim is different and is managed on a case-by-case basis, they process claims within the usual timelines.
Both Santander and Barclays added that the length of time it takes to process a claim varies depending on the nature and complexity of the claim as you continue to receive higher volumes of claims than usual.
While there is no timeline set out in the Consumer Credit Act that stipulates a deadline for handling Section 75 claims, companies must be mindful of their overall regulatory requirements to treat customers fairly while processing such claims, according to UK Finance.
He said it’s essential for customers to provide all relevant information to their issuer — it will always be easier to assess whether it’s current, so claiming sooner rather than later makes sense if a retailer denies a claim or stops trading.
The restriction law will also be an issue for clients to consider when considering a claim as this sets the timescale within which claims must be submitted.
If clients are unhappy with how the company has handled a claim, they can file a complaint with the company and then with the Financial Ombudsman Service.
Companies are required to respond to complaints within eight weeks and issue a final letter after which customers can submit their complaint to the Ombudsman.
Vacationers who take out travel insurance can also try to file a claim on their policy if the Section 75 one is unsuccessful.
Looking forward to this summer, when overseas travel is allowed, consumers are encouraged to take out insurance as soon as they make a reservation.
Travelers who book a holiday package will also get more protection and must receive a full refund within 14 days if the trip is cancelled.
While this takes a little longer due to the current circumstances, you are entitled to claim a full refund.
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