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GRENFELL TOWER - FINANCIAL HELP FOR SURVIVORS AND RELATIVES

Survivors of the fire in Grenfell Tower in Kensington lost everything except the clothes they slept in. They lost not just their clothes and...

Tuesday, 25 November 2014

MONEY BACK PLASTIC

If you pay for goods or services by credit or debit card or by a prepaid card you have clear rights to get your money back if anything goes wrong. So it is always safer to pay by plastic and you should always do so if you can. With a credit card you have two separate rights.

Legal right
If you pay by credit card for an item which costs more than £100 and up to £30,000 then the credit card provider has a joint legal liability with the retailer for the goods or services you buy. If the product or service goes wrong you can claim the full cost back from the credit card provider. 

For example, you pay for a holiday or flight and the firm goes bust. Or you buy clothes online and they do not arrive. Or you purchase an electronic device which stops working after a week. Or you pay for an online service which is a fraud. In all those cases you can use your legal right to get your money back from your credit card provider. 

The legal right covers purchases made anywhere in the world – whether you are buying in person abroad, or you pay online or by phone. Note the price limit applies to each item not the total amount of the bill. So two items of £80 each bought at the same time are not covered but one item of £160 is.

It is called your ‘section 75’ (or s.75) right because it comes from that section of the Consumer Credit Act 1974.

Of course, it is usually best to go first to the retailer or supplier to get your money back. But if they refuse or have disappeared or gone bust then the credit card provider must refund the whole cost.

Even if you just pay for part of the purchase on a credit card and the rest in some other way s.75 covers you for the whole purchase price if that falls within the limits. So if you buy a £750 sofa and pay a 10% deposit of £75 on a credit card and then you pay the balance in cash, you can claim a refund of the whole amount from your credit card provider if the sofa doesn’t arrive or is faulty.

There is no time limit on making a s.75 claim but it is always best to make a claim as soon as possible. If the purchase was more than six years ago you may find it more difficult as that is the normal limit on legal claims.

Section 75 rights apply to every credit card – Visa, MasterCard, or American Express (credit cards but not its charge cards).

Contract right
If you pay by debit card, credit card, or prepaid card you have a separate right to get your money back called chargeback. It is part of the contract between Visa, MasterCard, or American Express and the bank or firm that provides the card. Chargeback generally has no upper or lower limits, but MasterCard won’t consider claims for items that cost less than £10. Chargeback is most useful for plastic card purchases not covered by s.75. It does not apply to American Express charge cards but American Express credit cards are covered by it (and, of course, they are covered by s.75).

Chargeback covers the same problems as s.75 – goods that are defective, do not arrive, are fraudulent, or where the firm goes bust.

There are time limits for claiming which are quite complex. Normally you have to claim within 120 days – about four months – of realising something has gone wrong. But there is also an absolute time limit of 540 days which is about 18 months. So claim as soon as you know something has gone wrong.

The chargeback procedure involves your bank going to the bank of the supplier and trying to recover money from them. But even if the supplier’s bank refuses that does not affect your right to be repaid by your bank or card provider. Some guides suggest it depends on the firm you paid agreeing to refund the bank or card provider. That is not true. Although it is not a right under a legal provision, it is an absolute right guaranteed by Visa, MasterCard, or American Express and their contracts with the card providers.

Many banks and card providers misunderstand chargeback and frontline staff may well say that you cannot recover your money or they must wait for the provider to refund them. If the product has failed or not arrived they are wrong.

How to claim
Write to your bank or card provider setting out the details of what has happened and say you are claiming a full refund under s.75 of the Consumer Credit Act or under the chargeback procedure. In your initial letter always say that if you do not get a satisfactory response within eight weeks you will take the claim to the Financial Ombudsman Service. That tends to concentrate the mind. If the claim is refused or not resolved within eight weeks then do take it to the FinancialOmbudsman Service. Normally a claim to the Ombudsman costs the financial firm £550. It is free to you. The Ombudsman upholds most of the claims that reach it. You must go to the Ombudsman within six months after receiving a final refusal from the card provider.

Not covered
Section 75 and chargeback apply when the item you purchased is faulty, goes wrong, doesn’t turn up, or was fraudulent. They do not apply if you change your mind. However, if you buy online or over the phone you have an absolute right to reject the item as long as you tell the supplier within 14 days.

This blog is a longer version of my column in Radio Times which covers a new financial issue every week in 400 words.

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Sunday, 23 November 2014

HARDSHIP GRANTS AVAILABLE

More than 3000 charities distribute £288 million pounds in grants to individuals in financial hardship every year. And yet these grants are little known and hard to find.

Some give money nationally, others just to people in particular parts of the country. Some concentrate on those in a particular job - or retired from it - others to those with a particular medical need.

The charity Elizabeth Finn Care has held a database of them for some years and this week launched its improved Turn2us Grants Search to help people find the right charity to apply to.

For example a 45 year old woman with a Glasgow postcode can access 88 separate charities which will help with living costs, electricity or gas bills, career training, meeting an emergency, education costs and many other needs.

A 70 year old man living in Somerset can access grants from 73 different charities. And if he had worked in insurance another five pop up. Adding conditions such as occupation, health, religion, or family situation brings up more charities as many operate nationally to cover particular categories of people.

A whole range of disability and illnesses are catered for as well as twenty religions and family circumstances such as adopted, estranged, orphaned or pregnant.

Just about every occupation is covered in the national database, from accountants to writers, farmers to teachers, pawnbrokers to librarians. Among the 3000 charities there is a possibility for anyone in financial hardship to apply.

Turn2us says that people who have used the search have gained £2400 a year in income or more than £550 in one off grants. It also said that two out of three of those visiting Turn2us had not known about charitable help before and a third had been struggling financial for more than a year before finding help.

Apart from the grant search Turn2us also offers information about state benefits and a calculator to work out entitlement. And there are other resources to help people in need and those who work with them on the Turn2us website.

Wednesday, 19 November 2014

WINTER BOUNTY

UPDATED 4 DECEMBER 2016

A payment of £200 appeared in my bank account last week. I'm a freelance journalist so in itself that is not so unusual. But this payment wasn't a fee for work. Nor was it a payment for something I'd sold. Nor a gift from a kind friend. Unless you count Secretary of State Damian Green MP as a friend. Because Damian's Department for Work and Pensions sent me £200 tax free this week just because I was born before 6 May 1953.

The Winter Fuel Payment was introduced by Gordon Brown in 1997. It was £20 then and was increased in successive years by Gordon and then Alistair Darling to reach £250 in winter 2008. The final £50 – technically an addition to the £200 payment – was taken away for winter 2011 by the Coalition Government. That was one of its first austerity measures and one of the very few that have affected pensioners. Since then the Winter Fuel Payment has been (ahem) frozen at £200 per household and £300 if one person in the home is at least 80 (technically born before 26 September 1936). Its purpose is to help old folk with the cost of keeping warm in the winter.

Although free money is always nice, I don't need it. I haven't been worried, as many people are, about the cost of heating my home when it gets cold. And because it is tax (and NI) free and I am lucky enough to earn enough to pay higher rate tax it is worth the same to me as earning £344.83. So thank you Gordon for inventing it and Damian for continuing to pay it.

I am not sending it back. Nor am I giving it to Age UK or any other charity which helps people over a certain age cope with their heating bills. I prefer to concentrate what charitable giving I do on homeless people, especially young ones. By gift-aiding this tax free payment it will be worth £250 when it reaches the charity after Chancellor Philip Hammond kindly adds £50. In fact I will give £267 so the charity will get £334 and when I settle my self-assessment tax bill and claim higher rate tax relief it will have cost me just 25p.

So thank you Damian and Philip for giving me a bit more money to help the growing number of people left destitute by your sanctions (taking their benefit away if they fail to jump through all the JobCentre hoops). Left unhoused by councils whose government grants you have cut. Left paying a growing amount of their council tax even though their income is at poverty levels. Left paying a bigger and bigger share of their rent however low their income. Freezing their benefits last April, next April all the way through to 2020. And left with nothing by employers who want them to turn up as and when there is a bit of minimum wage work to do and go away unpaid if there is none, because your Government - like the last - has not legislated to end zero hours contracts.

Happy Christmas

vs2.00
4 December 2016

Saturday, 1 November 2014

CLAIM £200 to £500 FOR FLIGHT DELAYS

UPDATED 29 May 2017

If you were on a flight that arrived at least three hours late any time in the last six years you may be able to claim compensation of between €250 (£220) and €600 (£525) for each person affected. These amounts are fixed in euros and the fall in the  value of Sterling after the vote to leave the EU means they are worth considerably more than a year ago. These prices are as at 11 October 2016.

Similar rules apply to cancellations at the airport or within seven days before the flight was due to leave If you are given a replacement flight you will normally still be entitled to compensation if that arrives more than two hours later than the original flight - or departs earlier more than one hour earlier than the original flight.

These rules will continue to apply until the date the UK actually leaves the EU which is not expected until sometime in March 2019. The Government has promised a Bill to re-enact all EU law as UK law but that may or may not include flight compensation rights. We will not see the Bill until May 2017. If this EU Directive and case law ceases to apply in the UK the rules will still apply to flights from the EU to the UK on any airline and to flights from the UK to the EU on an EU based airline. 

The rules now
Three years ago the Supreme Court cleared the way for hundreds of thousands of compensation claims for delayed flights. On Friday 31 October 2014 it refused to hear further appeals by two airlines against earlier judgments saying they had no arguable case or that the law was already settled. 

Some airlines still tried to evade their responsibilities but on 17 September 2015 the European Court of Justice closed a loophole some had been trying to use.

Those judgments mean the law is now clear. 

Technical issues
First, airlines can no longer use technical issues including mechanical failure as an excuse for not paying compensation. The European Regulation EC 261/2004, which makes the compensation rules, gives airlines a get out clause for what are called ‘extraordinary circumstances’. In other words if the delay is absolutely not the airline's fault then compensation is not due. See 'Exceptions' below.

Many airlines have been calling technical issues with their aeroplanes extraordinary circumstances and refusing to pay compensation for the delays they cause.

But in June 2014 in a clear and unanimous judgment the Court of Appeal decided in a case against budget airline Jet2 that technical issues were part and parcel of running an airline and that the delays they caused could in no sense be ‘extraordinary’.

Jet2 tried to get the Supreme Court to look at that decision. But it refused to do so. The judgement releases tens of thousands of claims against many different airlines which have been held pending the court case. And any fresh claims for delay compensation because of technical issues such as mechanical failure should be successful. One law firm estimates more than two million passengers a year are delayed due to technical issues.

Some airlines tried to claim that unexpected or hidden technical defects were extraordinary circumstances. But in its landmark case in September 2015, van der Lans v KLM, the European Court of Justice ruled that such unforeseen defects could only be allowed as exceptional if they were, for example, a defect the manufacturer or a regulatory body discovered and announced. Anything else was just a normal part of running a complex system like an airline.

Back six years
The second important decision by the Court of Appeal was in a case against Thomson Airways. It ruled that cases for compensation for delay could go back six years rather than two. Thomson had been refusing claims which were more than two years old on the grounds that the Montreal Convention only allowed claims for that period. But the Court of Appeal decided unanimously that local law prevails so claims can go back for six years in England and Wales. The six year limit applies in Northern Ireland but it is only five years in Scotland. See section Jurisdiction below.

Thomson also tried to get the Supreme Court to revisit that decision. And again the Court refused saying the airline had no arguable case. So all airlines must now allow compensation claims for delays that occurred up to six years ago.

A further case Goel & Trivedi v Ryanair was tried in Manchester in August 2015. Ryanair claims that a provision in its own terms and conditions limits claims to two years which overrides the EU Directive. Ryanair lost the case but is appealing. It is possible that Ryanair and other airlines may try to delay claims for delays between two and six years ago until this case is finally settled. However, in a statement in September 2015 Ryanair said it did allow claims up to six year, though there is a lot of evidence that it does not.

Application
The EU Directive on compensation applies to flights 
  • which leave UK airports (or any EU airport) with any airline 
  • which arrive at a UK (or an EU) airport on an EU carrier. 
So all flights from UK airports are covered and so are most flights to UK airports. For example, a Qantas flight from Heathrow to Sydney would be covered; a Quantas flight arriving at Heathrow from Australia would not, but a BA flight from Sydney to Heathrow would be covered. 

The delay must be at least three hours and that is measured at the arrival airport. So a flight that leaves more than three hours late but makes up the time and arrives 2h59m late would not be covered. The arrival time was recently defined by the European Court of Justice as the moment when at least one of the aircraft doors is opened at the arrival airport.

The Directive covers cancellation. But the courts have interpreted the law so a delay of at least three hours is considered to be the same as a cancellation and give rights to compensation.

How much
Compensation for delay is on a sliding scale depending on distance and the length of the delay – a qualifying delay on a UK to Alicante flight for example would pay €400 (£360) per passenger. 

Flight distance
Length of delay
        Compensation*
Up to 1500km
3 hours or more
€ 250
£220
more than 1500km up to 3500km
3 hours or more
€ 400
£350
More than 1500km between two EU states
3 hours or more
€ 400
£350
More than 3500km - one airport outside the EU
{3 hours but less than {4 hours
€ 300
£260
{4 hours or more
€ 600
£520

*Compensation is specified in euros. Sterling amount is approximate and will vary; rates at 29 May 2017

Remember, these amounts are per paying passenger. So for a family of four they are four times as much. In many cases the compensation is more than the fare for the flight.

Compensation for cancellation is more complex but similar. If your flight has been cancelled within seven days before the original flight time - for example once you are at the airport - compensation will almost always be paid. If you are not offered an alternative flight it will be paid at similar rates to those above. If you are offered an alternative flight but it arrives two hours later - or departs one hour earlier earlier - than the original flight then similar compensation will be paid. The rules are complex but always claim if a flight is cancelled. Compensation for flights cancelled by the airline with more notice than seven days are different.

These rights are separate to any money or vouchers for a hotel, travel, or food paid by the airline. It has to make those payments as well.

Exceptions
Airlines can get out of paying if the delay or cancellation was due to 'extraordinary circumstances'. There is no definition in the law but that can include industrial action, extreme weather, war, terrorism, sabotage, political or civil unrest, hidden manufacturing defects, and bird strikes. But it can no longer include technical issues such as mechanical defects even if they were unforeseeable. Nor can it include computer system failures as large companies should always be available. In rare circumstances computer failure due to a major hacking attack may be argued to be 'extraordinary'.

Jurisdiction
Although the EU directive applies throughout the 28 member states of the EU, the Supreme Court ruling only binds courts in England and Wales. Lawyers say it would be 'persuasive' in Scotland and Northern Ireland. But it would not be binding on a case that was brought, for example, against the Stockholm based airline SAS for a flight from Hamburg to Dubrovnik. 

Enforcing your rights

If you are delayed the airline is obliged to explain your rights at the time of the delay. In the past many have not and on 21 March 2015 the Civil Aviation Authority took action against Are Lingus and Wizz Air to force them to obey this part of the Directive.

The CAA says that these airlines are paying without being difficult: British Airways; easyJet; Emirates; FlyBe, KLM/Air France; Lufthansa; Monarch; Thomas Cook; Thomson Airways; United Airlines; and Virgin.

Write to the airline to make the claim. State that you are claiming for delay or cancellation under European Regulation EC 261/2004. Don’t worry if you no longer have boarding passes or ticket details. As long as you can work out which flight you were on the airline will have your details on its manifest. If any airline refuses a claim you may have to go to court to enforce your rights. You can do that in a court in the country where (a) the flight landed or (b) the flight started within the EU or (c) the airline is based.

In England and Wales you can use the online service via the Government website.
In Scotland claims have to be made through the Sheriff Court - click here to learn more.
In Northern Ireland use www.nidirect.gov.uk

The court cases to cite are: 
Be determined
Expect some airlines to be difficult and try to put you off or delay matters. If the airline sends you a document headed Draft list of extraordinary circumstances following the National Enforcement Bodies (NEB) meeting on 12 April 2013 write back to say that list has no legal status, has been overtaken in England and Wales by the Appeal Court and Supreme Court rulings, and that you are relying on the law as set out in Regulation EC 261/2004. 

Ryanair has refused to pay claims where the flight originated in Edinburgh as it is outside the jurisdiction of the Supreme Court. RyanAir also resists claims in some other circumstances. On 18 September 2015 the Civil Aviation Authority began enforcement action against Ryanair.

Don't let these attempts to circumvent the court rulings put you off. The more difficulties airlines put in the way the fewer people will have the determination to pursue the case and get compensation. So make sure you pursue your claim and go to court if need be.

If an airline offers to pay the compensation in vouchers instead of money you are entitled to refuse and demand money.

Get help
A new online claiming tool has been launched by Resolver. It makes no charge for its service. Never use a claim management company. It will take 40% of your compensation and may or may not be good at the job.

You can get some advice free from the Civil Aviation Authority at www.caa.co.uk. If an airline has refused your claim the CAA offers an arbitration service. Its decision is not binding on the airline - though they usually follow it - and there have been long delays in the past as the CAA has inadequate staff numbers to handle the volume of cases. 

The CAA has two useful documents on its website. One about technical issues and time limits and the other about information which airlines should provide

And the EU has its own comprehensive guide to compensation and other help you can get for delayed or cancelled flights.

If you feel you need professional help you can use lawyers Bott & Co who specialise in airline cases. It has an online checker to see if you have a claim or not. If it takes a case then it charges 27% of any compensation obtained plus a €25 (£20) administration fee - both including VAT. Altogether that will be about a third of your compensation. There is no charge if you lose.

29 May 2017 
vs. 2.8