Section 75 of the consumer credit act
Who is your issue with?
Section 75 refers to a UK law that makes credit providers liable in the event that something goes wrong with one of your purchases. So, if you buy something with a credit card (or with store credit) and you don’t receive your purchase (or find that there’s something wrong with it), you can claim your money back from your credit card company. Section 75 typically only applies to scenarios in which there is a relationship between the seller, buyer and creditor – so situations in which you’re buying something from someone using credit supplied by someone else.
This is especially useful in situations where the seller has gone bust! In these cases, you can approach your credit card company and let them know you’re making a claim under Section 75 of the Consumer Credit Act. Resolver can help you with this! Use our free Section 75 claims tool to contact your credit card company!
What can I claim back with Section 75?
You can use Section 75 to make a claim against any goods that are faulty, not as described, misleadingly advertised, or that simply never arrived.
Section 75 can be used to claim back goods of a total value between £100 and £30,000. This doesn’t mean the actual amount spent using the credit card – rather, it refers to the total cost of the item(s) purchased. For example – if you were to use your credit card to pay a £1,000 deposit for a kitchen costing £12,000, your rights let you claim back the full £12,000 (as it is the total value of the goods that matters, not the value of the transaction). This does mean, however, that Section 75 does not apply to cases where you have used your card to pay a deposit for a transaction that amounts to over £30,000.
You’ll have to provide evidence to support your claim that there is something wrong with the items that have been delivered – you can’t use Section 75 to claim back items that you simply do not want. Your evidence should include details of any correspondence you may have had during the sale, including any receipts. When you have gathered all your evidence, use Resolver to get in touch with your credit card company.
Contact your credit card company, inform them of the situation and let them know that you intend to file a Section 75 claim. They should reply within eight weeks. If they fail to do so, you should contact the Financial Ombudsman (Financial Ombudsman - 0800 023 4567 - 8am to 8pm Monday to Friday, 9am to 1pm on Saturdays).
Credit card companies sometimes misunderstand their obligations under Section 75. Common misconceptions include:
- You have to reach a stalemate with the seller before the credit card company is liable - This isn’t true! You can make a claim with both the seller and your credit card company at the same time (but you can only take payment from one of them).
- The credit card company is only obliged to pursue the seller on your behalf - Incorrect! The credit company is liable for the whole amount themselves. You have a right to claim your money directly from the credit card company.
- Section 75 only applies to cases of written misrepresentation - This is not the case. Section 75 also applies in cases where you have been verbally misled into making a purchase, whether it’s in person or over the phone.
Can I make a Section 75 claim for items bought on a debit card?
Unfortunately not! Section 75 only applies to credit agreements – this means credit cards, store cards or store credit. If you’ve used your debit card, you may still be able to reverse the transaction using a chargeback
Does Section 75 apply to online shopping?
Yes! Section 75 applies to any purchases you make online, as well as any telephone, mail order, or overseas purchases you might make.
Does Section 75 apply to cash withdrawals?
No, Section 75 does not apply when you make a cash withdrawal to pay for a large transaction. In these cases, we recommend that you make the purchase directly using your credit card.
What do I do if my Section 75 claim is rejected?
If you feel that your claim has been unfairly rejected, you can appeal to the Financial Ombudsman. Resolver can help you escalate your complaint.
Section 75 and Paypal (and other third parties)
Current interpretations of Section 75 mean that claims made for payments made with a credit card via Paypal are highly contentious and are unlikely to be upheld. Essentially, this boils down to the rules of Section 75, which are dependent on a debtor-creditor-supplier relationship. Introducing another party (such as PayPal or Amazon) to the relationship breaks the chain, making Section 75 protection invalid. It is increasingly rare for Section 75 claims against Paypal to be upheld.
This seems unfair, but it’s a loophole that has come about thanks to Section 75’s age – Section 75 was drafted over 40 years ago, well before the advent of new third-party payment technologies and online shopping as we know it. Our advice is to avoid using PayPal and other third parties for large transactions. If you can’t do this, most third-party payment services have a payment protection system of their own (PayPal, for example, offers
Section 75 and travel agents
Similar issues apply when you make a purchase through a travel agent. These may be large transactions, but are often not covered by Section 75 as they break the creditor-debtor-supplier link.
Section 75 and ticket services
This is where Section 75 gets especially tricky! Ticket services are only liable under Section 75 in certain circumstances. Normally, the ticket service would need to be the sole vendor of the tickets – this means that they can’t be selling the tickets on behalf of a venue or band.
Section 75 and secondary cardholders
Secondary cardholders who make purchases may not be covered by Section 75! The same applies if the item purchased is in the name of someone other than the primary cardholder (this is particularly relevant to gifts bought using credit cards).
How to avoid problems with third parties
Our advice is to try and pay directly wherever possible – if you’re paying for a holiday, try and pay the hotel etc. directly. If you’re paying for tickets, try and get them directly from the venue. It may still be possible to claim under Section 75 in some cases – this may, however, be excessively complicated.
Section 75 claim tool
You can raise issues with 26 companies in Section 75 services
Key companies include: