Long-suffering Southern Rail season ticket holders may be able to claw back £1,000s if other credit card companies follow the example set by American Express in refunding a passenger who'd been plagued by delays.
Annual season ticket holder 'Sean', who asked not to give his real name, told MoneySavingExpert.com he'd used our "handy guide" to take advantage of protection offered in Section 75 of the Consumer Credit Act and get a £2,400 refund from his credit card provider on the cost of his Southern season ticket.
Section 75 rules mean that credit card companies are jointly liable along with retailers for making sure that customers receive the goods or services they paid for. As a result, Sean's credit card firm American Express (Amex) agreed to issue him with a partial refund of his ticket based on the regular delays he'd suffered.
MoneySavingExpert.com founder Martin Lewis says Amex's decision could "open the floodgates" for a raft of similar claims. Here's what's happened, how Section 75 works and how you can try to make a similar claim.
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'If you've been affected by disruption, try your credit card company'
Martin believes the Amex payout could potentially pave the way for a huge number of claims to credit card companies by disgruntled Southern season ticket holders.
He said: "When you take a credit card company on, if it rejects you, you have the right to go to the Financial Ombudsman. The Financial Ombudsman adjudicates based on three things: the law, standard industry practice, and 'have you been treated fairly?'
"The very fact that one credit card company has agreed to pay out could open the floodgates because of that standard industry practice rule. This isn't the first time we've seen something like this – we had something very similar on the Lowcostholidays debacle and many of you would have got money back on that using Section 75 and the [debit card] chargeback facility.
"The overarching rule here is that if you've got a Southern Rail season ticket and you've been badly affected by the disruption then you can try with Southern Rail, but equally you can try with your credit card company under Section 75."
Watch Martin's full explanation of what the Amex payout means below.
How Sean won his Section 75 refund
Sean told us he contacted Amex at the beginning of July 2016 to claim a refund for half the cost of his season ticket, which ran from September 2015 to September 2016. Using our Section 75 guide to help, he made a claim and using Southern's own punctuality data calculated that 50% of his journeys had been delayed or cancelled.
In his letter to Amex, seen by MoneySavingExpert, Sean wrote: "So far the service has not been provided due to extensive late running of trains. Most services run late and compensation in the form of rail vouchers (25% of ticket) is only paid on 30 minutes or more and through laborious claims procedures.
"As of 11 July, Southern has cancelled 15% of routes across its network across London. One in three of my daily trains are cancelled or delayed [and] strike action has also resulted in a loss of service."
Having taken Sean's delay data into consideration, Amex agreed to hand over a refund worth half the cost of his season ticket, reflecting the fact that half of his journeys had been disrupted. Sean received the refund back on his credit card on 21 July.
The Association of British Commuters, which first highlighted Sean's success, says it's already had an "incredible response" from members of its online community. Co-founder Emily Yates said: "Several members are now pursuing claims from their credit card companies."
Update Mon 23 Jan: American Express has since suggested it actually processed Sean's claim via chargeback rather than Section 75.
A spokesperson wouldn't comment on individual claims but told us: "American Express has two routes to raise a claim, Section 75 or the disputes route, which includes a potential chargeback. American Express has issued rail ticket refunds under the chargeback scheme in the last 12 months. However, it is important to stress that each claim is assessed on a case by case basis and that raising a dispute does not automatically result in a refund."
Either way, if you paid on a credit card, try making a Section 75 claim first, as it's more powerful protection. However if you paid by debit card, you can try using chargeback instead. In most cases you'll need to do this within 120 days of the purchase and only after you've tried to get a refund from the train company directly. See full help in our Chargeback guide.
Why Section 75 could be a game-changer for season ticket claims
Under Section 75 of the Consumer Credit Act, if you buy something costing between £100 and £30,000 and pay for it in part, or in full, on a credit card, your credit card provider's equally liable with the retailer if something goes wrong.
This means that if you paid for your Southern season ticket on a credit card and have been affected by disruption, you have two options when it comes to making a claim.
- Contact the retailer – ie, Southern, directly. This is a well-trodden path and Southern has processes in place to deal with such claims – see our Train Delays guide for more on your rights. However, if Southern disagrees with your claim for a refund, the only way to challenge this is through the legal system.
- Claim from your credit card firm under Section 75. You can take the Section 75 route, as Sean did, as long as your ticket cost between £100 and £30,000 (if it's a season ticket it should have) and was paid for in part, or in full, on a credit card. Importantly, if your Section 75 claim is rebuffed by your credit card company you can then escalate the matter to the Financial Ombudsman Service (FOS).
It's worth bearing in mind that technically the rules say you can't submit a Section 75 claim if you've already claimed compensation by another route. However this is untested, so if you've got a season ticket it's still worth submitting a claim even if you've received some compensation for individual journeys under the Delay Repay scheme.
There are two reasons why the Section 75 option is potentially a game-changer:
- Credit card companies have deep pockets... and because they're less exposed to Southern refunds than Southern itself, they may be more inclined to dip into those pockets to pay out.
- If your claim's turned down, you can go to the FOS. If your claim's rejected by Southern, you'd have to challenge it in court, but FOS makes its decisions based on the law, standard industry practice and whether or not the customer's been treated fairly – potentially giving you more hope.
Martin said: "Section 75 is incredibly powerful because you do not have to go to the retailer. You can go to your credit card companies, which have much deeper pockets, and claim the money from them. If this man has succeeded in claiming money from American Express, it means others have a far better chance of success."
Will Amex's decision set a precedent?
It remains to be seen whether Amex's decision in Sean's case will set a precedent in terms of standard industry practice, though FOS says it won't set one for its rulings.
A FOS spokesperson told us: "We look at each case on an individual basis so a single complaint doesn't set a precedent. Our approach to these types of cases involves looking at any agreement/contract someone has to see whether there has been a breach of contract or misrepresentation.
"If someone has complained to their credit provider under Section 75 and they remain unhappy with the response they can ask us to look into their complaint and we'll consider the individual circumstances. If someone is unsure whether they can make a Section 75 claim they should speak to their credit provider or contact us and we can check."
We've approached the major credit card providers for comment – so far only Barclaycard has responded, with a spokesperson stating that all Section 75 claims are considered "on an individual basis".
If you used your credit card to pay for some or part of your ticket, it's well worth submitting a request for money back using Section 75 – doing so is free, so although success isn't guaranteed it's worth a shot. To do so you should:
- Gather evidence of disruption. One of the reasons it's likely Sean's claim succeeded is that he submitted it with strong evidence of delays – in his case, he quoted delay data direct from the train company. If you have records of the delays you've suffered, make sure you submit it.
- Work out how much to ask for. When Sean contacted his credit card firm, he only asked for half the cost of his ticket back as only half of his services had been delayed. Using the information you have to hand, estimate how much the services that have not been delivered were worth, and use this to tailor your refund request.
- Contact your credit card provider. Once you have all this information, contact your credit card company and request a Section 75 claims form. You may need to explain why you believe you're entitled to a refund under Section 75 – if so, use our Section 75 guide to help.
- Submit your claim. Fill in the form – and include all the evidence you can to strengthen your claim.
- If you're rejected, you can appeal to the FOS. The Ombudsman has the power to overrule decisions made by financial institutions, such as credit card providers. If you don't agree with your card company's decision to reject your claim, you can escalate the matter to the FOS online or by calling 0800 023 4567 (but you must give the card company eight weeks to provide a satisfactory response to your complaint).
For full help on how to make a claim, see our Section 75 guide.
If you're a Southern customer who has managed to get a refund on your season ticket, please let us know by emailing firstname.lastname@example.org.