NewDay Ltd · DRN-6250342

The complaint Miss G’s complaint is about how NewDay Ltd (NewDay) handled a refund claim she made. What happened The details of this complaint are well-known to both parties, so I won’t repeat them again here. The facts aren’t in dispute, so I’ll focus on giving the reasons for my decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’ve read and considered the evidence submitted by the parties but won’t comment on it all – only the matters I consider to be central to this complaint. This isn’t intended as a discourtesy but reflects my role in resolving disputes informally. It’s important to note that NewDay aren’t the provider of the services here – so in deciding what is fair and reasonable, I’m looking at their role as a provider of financial services. In doing so I note that because Miss G paid for this transaction using a NewDay credit card, both chargeback and a Consumer Credit Act 1974 (CCA) Section 75 (S75) claim could possibly help her. So in deciding what is fair and reasonable, I’ve focused on this. As a summary, Miss G used her NewDay credit card for car services from a garage I shall call ‘T’ in April 2025 for £934.49. She says that she later discovered issues with the car and as her complaint wasn’t satisfactorily resolved with T, she contacted NewDay to raise a refund claim. Chargeback Chargeback is the process by which settlement disputes are resolved between card issuers and merchants. A consumer isn’t entitled to chargeback by right. But where there are grounds to raise one and it has reasonable grounds for success, it is good practice for one to be raised by the card issuer. However, a chargeback isn’t guaranteed to succeed and is governed by the limitations of the particular card scheme rules (in this case Mastercard). I’ve considered the relevant chargeback rules in deciding whether NewDay acted fairly. The relevant chargeback code here would be ‘Goods or Services Were Either Not as Described or Defective’. I’ve therefore considered the evidence available with regard to this chargeback rule, and whether NewDay acted fairly when they declined Miss G’s claim following the merchant’s objection. Under the Mastercard chargeback scheme, a claim under this chargeback code requires clear and persuasive evidence that the supplier failed to provide the agreed service for the disputed amount. While I’m aware that Miss G provided a subsequent independent report

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regarding the repairs, I consider that it only directly attributes one of the faults to T’s workmanship, rather than demonstrating that the overall service was defective. In addition, T had already offered to reinspect the vehicle and either carry out remedial works or provide a full refund for the relevant parts if returned to them. Given this, the position between the parties hadn’t broken down to the extent that a refund-based recovery through chargeback was the only reasonable course – T was still engaging and offering to put matters right. In those circumstances, I don’t think NewDay did anything wrong in not progressing the chargeback claim. I don’t think there was a reasonable prospect of success if it had progressed further, with mind to the available evidence and T’s offer to rectify the issue. By contrast, a claim under S75 allows a broader and more proportionate assessment of liability. I’ll therefore consider NewDay’s assessment of the S75 claim which I think is more suitable for Miss G’s complaint. S75 S75 provides that in certain circumstances the borrower under a credit agreement has an equal right to claim against the credit provider if there is either a breach of contract or misrepresentation by the supplier of goods and services. To assess a valid claim, NewDay would’ve needed to consider all relevant evidence for the alleged breach of contract or misrepresentation. But for there to be a valid claim under S75 there are certain technical requirements and I’m satisfied they’ve been met here. From the outset I must clarify that I’d need to see persuasive documentary evidence that the repairing garage was responsible for the issues Miss G experienced. I’ve therefore reviewed the subsequent independent report and note the following comments in relation to each of the faults found: • Sump plug leaking – the report clearly states that the new sump plug washer had not been fitted in the previous repair. I agree that this clearly identified an issue with the repairs done in the original garage and that the missing washer is the likely reason for the leak. • Drive shafts seals leaking – it said this issue was not noted in the MOT or found in checks carried out in the full service. This comment is rather different from the one made on the sump plug leak – it notes there is a leak but it only says it wasn’t noticed at the previous garage checks. This therefore doesn’t confirm if the leak was present during repairs. While I note the second garage suggested the service report could show what checks were carried out prior, I don’t think this would be enough on its own to demonstrate the leak was present at the time of T’s repairs. I note our investigator also commented on the fact Miss G had driven a further 2,400 miles before the second garage’s inspection. While I appreciate Miss G’s comments that she had said the issue had existed prior to this, the key thing to note is that I don’t have documentary evidence to confirm this leak was present during the time T did their repairs. T’s comments to Miss G on this issue on 16 May 2025 was that they thought that if a leak had been present it should have been identified. They apologised if it had been overlooked – but at no point did they confirm that the leak had existed and it had been missed.

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While I appreciate that Miss G is convinced that the leak existed at the time and wasn’t identified, the subsequent independent report doesn’t confirm this, only that it hadn’t been noted. I therefore can’t agree there is sufficient evidence it was missed rather than something that developed later. Ultimately I need persuasive evidence that the leak was missed or was a result of defective repairs and I can’t say this has been provided. • Squeaking brakes – the report states this is due to poor quality brakes fitted. It says that Miss G was charged for midrange brand discs and pads. It then states that the braking parts were from a budget brand and while Miss G had been told the squeaking would quieten down, they didn’t think this was the case. This states that the brakes were a budget brand and therefore of poor quality. I don’t think this is sufficient evidence that the tyre brand used was below a reasonable quality. Even with this in mind, T’s invoice doesn’t make any promises on the quality of brakes used. The Consumer Rights Act 2015 and specifically Section 9 implies terms into a contract that goods and services need to be of a standard that a reasonable person would consider satisfactory. I can’t say the report is sufficient to say the brakes were unsatisfactory here. I also appreciate the independent report suggests the squeaking won’t quieten down which contrasts with what was said by the original garage. However, as I don’t have sufficient evidence to say substandard brakes were installed, I can’t say I have enough evidence to conclude the report’s assertions are true in terms of the brake noise. In summary, I know this’ll be a disappointment to Miss G, but I only think there has been a breach of contract regarding the sump plug washer not being fitted as this was clearly identified as being attributed to the original garage. Therefore I think NewDay should cover the costs for repairing the sump plug fault. NewDay has agreed to reimburse Miss G for this, following receipt of a repair invoice, which I consider fair. I’ve also considered whether there was a misrepresentation under S75. I don’t think there was – I say this because it requires T to have made a false statement of fact that induced Miss G into taking out their services. In this case, while I think an aspect of their service looks to have been substandard, I don’t think there was evidence of any false statements made to Miss G before the repairs were taken out. I consider NewDay should cover the costs of addressing the sump plug fault but I don’t think there is sufficient evidence for the remaining issues to be considered a breach of contract by T. So I won’t be asking them to do anything more. My final decision My final decision is that I uphold this complaint. To put things right NewDay Ltd must: • Reimburse Miss G for the reasonable cost of repairs to address the sump plug fault, if Miss G has them carried out and provides a copy of the repair invoice. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss G to accept or reject my decision before 24 April 2026. Viral Patel Ombudsman

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