Traditionally, consumers are able to claim the cost of the defaulted goods or services from the bank via a policy called “Charge Back”. Under the scheme, the customer need only inform the bank and the money for the unused portion of the product is refunded. The bank then reclaims the money from the retailer with which the transaction was made.
However, the cost of a three-year manufacturer backed warranty is rolled into the overall cost of the new car, and therefore not billed as a separate cost of service. As a result, banks are currently refusing to settle such claims.
Independent automotive warranty provider, Warranty Direct (www.warrantydirect.co.uk), strongly believes that despite this, customers have a strong case for a right of reply under the “Charge Back” rules.
“Although it is not a separate entity of the purchase price, the cost of a warranty is an easily quantifiable figure and so we see no reason why the consumer is being denied this right of reply,” explained Duncan McClure Fisher of Warranty Direct.
Using insurance industry guidelines, Warranty Direct calculates that the cost of policies underwritten by MG Rover at 5 percent of the value of the purchase price. So for a £15,000 car, the warranty can be valued at £750.
Warranty Direct is urging customers who purchased using their Visa Debit Card and have been unable to exact their rights under Charge Back rules to complain to the Financial Ombudsman Service. Call 0845 080 1800 or visit www.financial-ombudsman.org.uk
Warranty Direct offers a 20 percent discount on all MG Rover vehicles under-3 years old.