Claims under section 75 of the Consumer Credit Act

18/01/17 Give yourself some credit

Take the first step in resolving your complaint, raise your issue free via Resolver.

If you’ve paid for goods or services on a credit card and something goes wrong, you’ve got more rights than you think. It sounds a bit legalistic, but section 75 of the Consumer Credit Act can help you get your cash back. And it covers a huge range of problems, for example, if your online shopping doesn’t turn up, or the business that’s building your conservatory goes bust or you’ve been tricked into taking out a dodgy timeshare.

Here’s how it works

There are loads of ways to pay for things when you go shopping. But no matter whether you’re online or on the high street, you have certain rights if you pay by credit card that you don’t have if you pay by other methods.

Paying for goods or services with a credit card (or certain other types of credit agreement) gives you statutory protection if something goes wrong under the Consumer Credit Act. This means that you can ask the card provider to give you a refund if the goods or services you’ve paid for don’t turn up or are ‘misrepresented’ (in other words, what you’ve been sold isn’t what you were told it would be).

These claims are made under what’s known as ‘section 75’ of the Consumer Credit Act (section 75 is the section of the act that applies to purchases like this). This is an incredibly useful piece of legislation that many people don’t know about. In theory, you can make a claim if the seller goes bust, or if you’ve only partially paid for the goods on a credit card.

It’s not all straightforward, though. Claims made under section 75 have to meet certain criteria and are looked at on a case by case basis by the card provider.

How do I know if I’ve got rights under section 75?

If you pay for goods or services on a credit card that cost between £100 and £30,000, the credit card provider is jointly responsible, along with the supplier of the goods or services, for any breach of contract or misrepresentation. This can involve goods not turning up, items that are damaged or don’t do what they are supposed to do or situations where you’ve been misled by the supplier. You don’t need to complain directly to the supplier either – but we strongly recommend you do. In fact, make the same complaint using Resolver and cut and paste the same information.

You’re even covered if you’ve only paid for a deposit for something on your credit card – as long as the deposit cost between £100 and £30,000. In cases like this, you’re still covered for the whole value of the item in question. So if you pay a £200 deposit for a sofa that costs £2,000 on your credit card and the rest in cash, if the firm goes into liquidation the card provider would, in theory, have to pay you the full £2,000.

But there are a number of other conditions that must apply before you make a claim:

• The card provider must be based in the UK, though you can complain about purchases made to businesses overseas.
• You are only covered if you buy directly from the supplier, not a third party. This is known as the debtor-creditor-supplier relationship and it’s enormously complicated. If in doubt, put a claim in any way.
• Debit card payments, cheques and transfers are not covered by the Consumer Credit Act, though you may be able to make a ‘chargeback’ if there’s a dispute with a debit card payment. 
• Though section 75 of the Consumer Credit Act is a great piece of legislation when it comes to consumer rights, it is still open to interpretation. So though it makes sense to pay for items on a credit card, just in case something goes wrong, it does not guarantee that you’ll get your money back.

Which credit card providers can I raise my claim with?

Resolver allows you to raise your claim with a large number of credit card providers. We’ve provided links to the top 8 providers, if yours isn’t listed then please use our search to find the credit card company you wish to raise your claim with.

If your credit card provider is not listed in the table above, please use our search to find your provider.  Alternatively click the link to view the credit card providers.

Other ways of paying and the rights they give you

None of the following methods of payment are covered by section 75.

Cash: paying by cash is still one of the most popular ways to pay for goods but if something goes wrong, there’s no audit trail to investigate. So you’ll need to keep hold of your receipts. If you make a significant purchase, photograph your receipt and email it to yourself so you can save it – just in case. This also helps if you need to make an insurance claim for items damaged or stolen.

Cheque: Lots of people think cheques are dying out, but millions are still issued every year. Cheques work by using the ‘clearing system’ – which is well over 100 years old! Cheque fraud is sadly still very common so you should never release goods after accepting a cheque for them as they can still bounce up to and including the 6th day of clearing. There are also stolen banker’s drafts that do the rounds too, so be cautious. Check out the 2-4-6 rules if you want to know more about your rights.

Store card: Store cards are good for getting 10% off goods when you first take out the card, but pay them off straight away and cut them up. The interest rates are often extortionate and they’re an added complication when it comes to managing our finances.

Debit card: Section 75 doesn’t apply to debit cards, but card providers offer a similar scheme called ‘chargeback’. Chargeback means you can ask your bank to get you back your money if you dispute a transaction (if you didn’t make it or authorise it). Chargeback isn’t a legal right and the timescales vary when it comes to how long you have to make a request – so don’t delay. While not set up to deal with disputes between you and a retailer, it’s worth asking your bank to help you out. And there’s no upper or lower limit.

Bank transfer: You should never transfer money unless it’s to someone you know or trust. As soon as you click send, the money is gone. So if you’ve put in the wrong number – or worse, been conned by a fraudster, you could lose everything. Be wary.

Electronic Money: In recent years, websites like PayPal allow you to transfer money electronically. The have their own buyer/seller schemes that help mediate if there’s a dispute over a sale and you can complain to Resolver and fail that to the financial ombudsman too.

Take the first step in resolving your complaint, raise your issue free via Resolver.