Reclaiming money from bailiffs with Chargeback
A Chargeback refers to a compulsory reversal of a transaction to your account initiated by your bank.
If you were deceived into transferring money to a bailiff under the pretense of a legitimate purpose, which later turned out to be fraudulent, you can request a chargeback for card payments or a transaction reversal for online transfers through your banking app.
Certain bailiff companies may insist on bank transfers or cash payments due to a high volume of chargeback claims. However, even with online transfers, you can still reverse the transaction if you discover it was based on fraudulent grounds.
Within 90 days of the transaction date, submit a report to the police using their online webform, indicating that you were misled into sending money, and obtain a police reference number.
When completing the online form, select the option "Bank account >> a trusted person was involved."
Then, contact your bank or card provider, informing them that you have been deceived into transferring money. Provide the police reference number and request that they block your card and issue a replacement. This prevents the bailiff from attempting further charges to your card.
It's possible that some bank employees may not be familiar with the Chargeback process. In such cases, ask to speak with a supervisor, as resistance to initiating a Chargeback could occur.
By reporting the transaction to your bank as a fraudulent activity and referencing the police case number, the bank will freeze the bailiff company's bank account. However, it may take several weeks to recover your funds. The bailiff company has the option to appeal to their bank against the freeze on their account.
NEVER use the word "bailiff" on the Chargeback form.
Example wording to use on the Chargeback form or banking app
Chargeback is not as widely recognised as Section 75 of the Consumer Credit Act 1974, and bank personnel may not be familiar with its provisions.
The chargeback scheme typically operates as a safeguard mechanism among card issuers, ensuring the reimbursement of funds in case of complications arising from a card transaction.
Always reach out to the police through their website to report the offence. They will provide you with a crime or incident reference number.
Giving a police crime or incident reference number enhances the strength of your case.If your chargeback is successful, the bailiff company is obligated to pay an administration fee ranging from £10 to £80 as outlined in their Merchant Service Agreement.
If you made the payment using a credit card, you have the option to pursue legal action against both your bank and the bailiff as the merchant in the small claims court for breach of contract under Section 75 of the Consumer Credit Act 1974. However, you cannot take legal action against your bank or card provider for failing to honour a chargeback due to the absence of legal support for the scheme.
In cases where the bailiff has already settled the debt with the council or creditor before you initiate the chargeback, and you subsequently challenge or appeal the original debt, you may end up receiving a refund twice.
If you postpone your Chargeback application until after the bailiff company has settled the debt with the creditor, and subsequently, the bank reverses the card transaction, your debt is effectively covered by the bailiff company.
Some banks promptly refund your account, although they may reserve the right to reclaim the funds if your claim is unsuccessful, while others indicate that they will conduct an "investigation."
If your bank denies your Chargeback request, you have the option to escalate the matter to the Financial Conduct Authority within six months of receiving the final resolution letter.
Using a CREDIT card to pay a bailiff affords you the additional safeguard of Section 75 of the Consumer Credit Act 1974, which imposes joint liability on the credit card company and the merchant in the event of any issues. In such cases, you can pursue legal action against the bank.
Providing a sworn statement of truth strengthens your application, demonstrating that the card transaction was made under duress. This significantly enhances the likelihood of a swift Chargeback approval, ensuring the prompt return of your money without the need for litigation.
Alenezy v Shergroup Ltd | [2022] EWHC 777 (QB)
Following a ruling in the High Court in 2022, it was determined that conducting enforcement through an electronic money transfer constitutes "taking control of goods." In such cases, if the cardholder is not the debtor, they must file a third-party claim to the transferred funds.
Subsequently, bailiff companies have been able to request their banks to designate their card payments processing accounts as "trusted" and provide a security deposit. This arrangement allows bailiff companies to access funds from any bank account simply by possessing the card, without requiring the cardholder's permission or awareness.
It is imperative to obtain a crime or incident reference number from the police if your card has been taken from you and to relay this reference to your bank. Additionally, it is crucial not to sign any documents or receipts for the bailiff.
This action supersedes the "trusted" status of the payment processing account, resulting in the return of funds to the cardholder (or debiting from their escrow fund). As a consequence, the payment processor imposes a transaction dispute fee on the bailiff's account.
Since 2021, card payment processors have been imposing transaction dispute fees on bailiff companies, irrespective of the dispute's outcome. The fee, ranging from £20 to £80, depends on the payment processing account holder's prior conduct.
The Law:
Paragraph 6 of Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 (the 2007 Act) states:
2)The property in any goods ceases to be bound—
Official Guidelines:
The Government published official guidelines called, Taking Control of Goods: National Standards 2014, of which Paragraph 31 states: