Tony Hetherington is the top researcher at the Financial Mail on Sunday – This is Money’s sister title. He is an expert at fighting reader corners, revealing the truth that lies behind closed doors and winning victories for those who have no money. Below you can read how you can contact him.
GH writes: In 2021 I was approached by art investment company Smith & Partner Limited, and after several phone calls I was persuaded to purchase a limited edition print. I paid for this and some subsequent prints with my Halifax card.
Finally, an excited salesperson from the company called to say that a gallery wanted my prints and would almost double my investment.
However, the gallery wanted a larger set of prints, so Smith & Partner suggested that I purchase a further 11 for £25,600, bringing my total investment to £49,250. The gallery would then pay me £96,750 for it. I paid, again with my Halifax card.
Subsequently, Smith & Partner admitted that the deal was unlikely to go through. I hoped I was protected by using my card, but Halifax’s owner Lloyds says my payments were processed by a ‘third party’, meaning all protection has been lost.
Protection?: Artwork sold by Smith & Partner, for which payments were made through a third party
Tony Hetherington replies: I have has reported on the Smith & Partner Limited art scam over the past year. It finally collapsed last August. Preliminary figures from the liquidator show debts of around £1.26 million, but this does not include claims pouring in from investors who only realized they had been defrauded after the company had already gone bankrupt.
The trick they pulled on you and other investors to get you to spend more money is a classic sign of a scam, and a number of figures involved in this fraud have since surfaced at other companies offering art and even whiskey barrels as investments to put into the market.
But what you have run into is an even bigger pitfall, and it exposes the flaws in a safety net we have all taken for granted for the past fifty years. In a nutshell, section 75 of the Consumer Credit Act 1974 makes credit card issuers liable along with retailers if a purchase worth £100 to £30,000 goes wrong.
But there are conditions attached. First, the protection only applies to credit cards and not debit cards. You’ve used both on different purchases, so section 75 won’t cover the £19,600 you spent on your Halifax debit card.
And second, the card payment must be made to the merchant, and not to a third party. This is called the ‘debtor-creditor-supplier’ chain. If you breach this you lose the legal protection of Section 75. You might think this is simple. Who goes into a store to buy something, but then gives their credit card to a completely different store before picking up the goods from the first store? No one. But there is a pitfall – and it is a big one.
What if you buy by phone or online? You give your card details to the retailer, but you don’t know if they were ever authorized by the card companies.
If they have never been allowed to accept credit cards, they can launder your payment through an authorized company run by a friend who pockets a percentage. You get your goods, so you’re none the wiser.
But if you don’t receive the goods, or if they are defective, you may have trouble claiming from the bank that issued your credit card because you have unknowingly broken the debtor-creditor-supplier chain. And this is what happened to you. Your card payment actually went to a company called MMS.Payzoneonline London.
Lloyds Bank, which owns Halifax, says this leaves you outside the protection of Section 75. But wait a minute – you had never heard of this company, let alone paid for it, so why doesn’t this count as an unauthorized payment that needs to be refunded? Difficult, the bank replied, you authorized the payment and it made it to Smith & Partner, even though it was a detour that cost you all your legal rights.
Despite all this, however, there is a happy ending. Halifax staff had clearly read The Mail on Sunday’s investigation into Smith & Partner. They told me: ‘Keeping our customers’ money safe is our priority and we have great sympathy for Mr H as a victim of fraud. We have now refunded the full amount as we did not provide the usual high level of service when we first assessed his claim.”
So, well done to Halifax and Lloyds for refunding not only your credit card money, but also your debit card losses.
But the problem remains. UK Finance, the trade body representing the banks, sees the whole issue as difficult and complicated and suggested talks to Visa and Mastercard. And Visa and Mastercard told me that decisions about Section 75 claims are the responsibility of each individual bank that issues their cards.
This is no help. Consumers need clarity, not confusion. Finance ministers are revising the 1974 law, including Article 75, perhaps the most successful piece of consumer protection in recent decades. Let’s hope they close this annoying hole in the system that favors scammers and victimizes cardholders.
Where is my £188 refund from Boost?
Problem: The check was not cashed
BB writes: When I left my home, there was a credit on my energy meter of an agreed amount of € 188.
Boost, Ovo’s renewable energy division, says I received a check for this amount months ago but, despite repeated calls, I never received such payment.
Tony Hetherington replies: When you tried to claim the credit, Ovo told you: ‘We’ve already sent you your Boost final statement dated April 4, and your Boost final refund check for £188.56 on April 1; There is no more credit on your meter.’
That seems definitive enough, except no one at Ovo bothered to find out if the check had been cashed. And it doesn’t seem to have occurred to anyone to wonder if maybe the check was sent to your old address and never reached you.
After I contacted them, Ovo officials discovered that their check had never been cashed. And they told me they didn’t have your new address – even though you said you gave it to them. Ovo has now transferred the missing €188.56 directly to your bank account, plus €150 on top to make up for the long delay and because you had to fight to get your own money back. I’m happy to say you checked and the money is really there this time.
If you believe you have been a victim of financial misconduct, please write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Due to the large number of questions, personal answers cannot be given. Only send copies of original documents. Unfortunately, these cannot be returned.
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow a commercial relationship to compromise our editorial independence.