Credit card refund backfires for couple
When Dana and Brian McPhail ordered a $7,400 walnut door from Ultima Home Products, they were told it would take eight to 10 weeks. Instead, it took six months.
Tired of waiting, they asked Visa for a refund of their $2,200 deposit. Visa agreed and when Ultima filed a rebuttal, Visa ruled in the customers’ favour.
What happened next is a cautionary lesson for consumers who think that getting a credit card refund can protect them from legal repercussions.
Shortly after Ultima was turned down by Visa, it filed a $15,000 action against the McPhails in small claims court and put a $12,345 lien on their house.
The home improvements company, based in Woodbridge, Ont., has been in business since 1960. Until recently, it was a preferred installer of windows and doors for Home Depot. Home Depot referred the McPhails to Ultima last May, after telling them it didn’t stock the walnut door they wanted. Why did the couple get into trouble after securing a credit card refund? The company had a contract that protected it from giving money back after the first 10 days. “We have a clause that states Ultima will not be responsible or held liable for any delays that are beyond our control, caused by the manufacturer or an act of God,” said Ryan Heritage, general manager. “This clause is very, very visible and is actually on the front page of the contract, where the estimated lead time is.” The couple signed on July 11 of last year and got the refund from Visa on Dec. 14. The door arrived on Dec. 15, just a day later. Heritage said there was a labour strike, followed by a customs holdup. Then, CN Rail lost the shipment for 10 days in northern Ontario. He insisted that the McPhails were kept informed, but they tell a different story. “We had no contact with Ultima for the months of July and August, so we assumed our order was under way,” said Brian McPhail. “In the third week of September, I called our salesman to get an update. He said he was no longer with the company and had no information.” Heritage said the supplier had to find a walnut tree in Peru to cut down for the size of door they ordered. They thought the door was a stock item in Kelowna, B.C., McPhail said.
In November, he got a new job in Ottawa and decided to list his house for sale in March. He couldn’t handle an indefinite delay.
“Our current door was 25 years old and was letting in cold air. It had no curb appeal whatsoever,” he said. “All we wanted at this point was to get a door installed that would help us sell our house.”
“In the third week of September, I called our salesman to get an update. He said he was no longer with the company and had no information.” BRIAN MCPHAIL
The McPhails learned about the lien only when they went for mediation at small-claims court last month. They had the lien removed by a lawyer, since the paperwork wasn’t filed on time.
Ultima plans to proceed with the small-claims court case, Heritage said. In his view, customers can’t order a product and refuse it because it takes too long to arrive.
My advice: Read a contract before signing. Get delivery dates in writing. Then, add a clause allowing for a refund if the deadline is not met. Free seminar: You can brush up on the basics of personal finance at a Ryerson University workshop I’m leading on June 19, 5.30 to 9.30 p.m., 297 Victoria St., 7th floor, Peter Bronfman Room. Advance registration is not required. Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca, 416-945,8687 or ellenroseman.com