What is Section 75 of the Consumer Credit Act?
Section 75 of the Consumer Credit Act 1974 is a piece of legislation designed to remove the risk that you, as a consumer, will ever get into debt paying for goods or services that you didn't receive, were faulty or were otherwise not as described.
What protection does it give me?
When you use your credit card to pay for goods or services between £100 and £30,000, Section 75 holds your credit card provider 'jointly and severally' responsible for your purchase. This means that you have the right to claim a refund from your credit card provider if there is a problem with the goods or services you ordered.
There is no time limit for making a Section 75 claim, however if you're unhappy with how the claim is handled you have just 6 years in which to pursue your credit card provider through the courts.
How does it work?
To claim a Section 75 refund from your credit card provider you will need to have paid for goods or services on your credit card that cost more than £100 and less than £30,000. Additionally, the total amount of credit borrowed cannot be greater than £25,000.
Technically, this qualifying amount needs to be for a single item (or booking) before any delivery charges or additional fees are added. The exception to this rule is when you make a purchase as part of a '2 for 1' style special offer or deal.
In this instance as long as the total value of the conjoined purchase is more than £100 and less than £30,000 you should still be able to make a claim.
How do I make a claim?
If you make a purchase for goods or services that fail to materialise, are faulty, are poor quality or are inadequate in some other way you have the option to place a claim with your credit card provider right away. However, it is usually best to first approach the retailer or service provider directly (where possible) and ask for a refund.
If this proves fruitless you should then do the following:
Contact your credit card provider in writing explaining that you'd like to request a refund under Section 75 of the Consumer Credit Act 1974.
Specify what the problem is (e.g. whether the product was faulty or has not arrived etc).
Include details such as the date you made the purchase, the retailer or service provider you made the purchase with, the products or services you paid for with credit card and their total value - it can be useful to include copies of any receipts or other paperwork you have relating to the transaction.
Explain that you have tried to resolve the issue with the retailer without success and include copies of any correspondence you have with them.
Specify a time limit within which you'd like the matter resolved.
Alternatively, you could try calling your credit card provider and request that they send you a Section 75 claims form (offered by some credit card providers) which you should then complete and send back to them with copies of any supporting documents requested.
If you need help with your claim you can contact Citizen's Advice.
Must you pay in full by credit card?
Providing the total value of the item purchased with your credit card is greater than £100 and less than £30,000 you will be protected by Section 75 of the Consumer Credit Act even if you only pay a deposit with your card and use another method of payment to settle the outstanding amount.
For example, if you pay a £20 deposit for an item priced at £200 on your credit card and then settle the rest by cheque your credit card provider will still be jointly liable for the whole amount.
Are overseas purchases covered?
Any purchase you make by credit card while you are abroad will be protected under Section 75 of the Consumer Credit Act, providing they fall within the £100 - £30,000 inclusion range.
Similarly, any purchase you make from a company based overseas will receive the same level of protection when you pay by credit card. This holds true regardless of whether you make your purchase online, by telephone or via mail order.
Can you claim for associated costs?
Section 75 does allow you to claim for "consequential losses" which are caused because from the original problem, so if you have to pay out for unexpected travel or hotel costs for example you can try to claim.
Exactly what is defined as a "consequential loss" however is open to interpretation so making a claim may be more difficult.
Are debit card purchases covered?
Purchases made using debit cards, charge cards, gift cards, the vast majority of prepaid cards, cash or cheques do not qualify for Section 75 protection. This is because they do not operate under a credit agreement.
The Debit Chargeback scheme does, however, offer some protection for purchases made on Visa and MasterCard debit cards. This scheme enables you to obtain a refund from your debit card provider if any purchase you make on your card is unsatisfactory, doesn't arrive or is faulty.
It also protects you if your card is used fraudulently. However, unlike Section 75 there is no legal obligation for providers to fulfil this protection so placing a claim with the issuer of your Visa card or MasterCard provider may require a little persistence.
What about companies in administration?
You should be able to claim a Section 75 refund on unfulfilled goods or services purchased from a company that has gone into administration - as long as your purchase was valued between £100 and £30,000 and you made at least a deposit using your credit card.