Section 75: Your Free Purchase Protection
Section 75 gives you extra protection for any £100+ purchase (up to £30,000) and can save you thousands if something goes wrong. Read our guide and never use your debit card again.
What is Section 75?
Section 75 may be the most consumer-friendly bit of legislation ever written. Quite simply it makes it a no-brainer to make your purchases on a credit card and not a debit card. It is a section of the Consumer Credit Act 1974, which states that credit card companies are "jointly and severally liable" alongside retailers. In English, that means that if you buy something with your credit card and there is a problem you can go to your credit card company to get your money back. Section 75 gives you powerful rights to a refund should anything go wrong with a purchase made on a credit card. Millions of people are losing out when things go wrong either because they don’t know what Section 75 is or because they’ve made purchases by debit.
Can I make a claim?
If there’s a problem with your purchase or the company goes bust, the credit card company has to make sure you get your money back. You can claim under Section 75 if you order something and the retailer goes bust or if an ordered item never arrives or the goods are faulty. There is a limit though, what you buy has to be worth between £100 and £30,000. But if you only put down a deposit on your credit card for something worth between those two values you can still claim back the full amount from your credit card provider if something goes wrong. For example, if you are buying a £30,000 car and you put down a 10% deposit using your credit card and pay the remainder in cash or with your debit card, you can still claim the full £30,000 back from your credit card company if the car dealer fails to deliver the car to you. Examples of when you can and can’t use section 75:
- The £120 Coat you ordered online never turns up and you can’t get the retailer to return your calls: Section 75 is your friend.
- You put a £100 deposit down on a £500 sofa with your card, paying the rest by cheque but the sofa shop goes bust before the sofa’s delivered: Section 75 covers all £500.
- You buy a qualifying item on your credit card but since then you’ve closed your credit card account: Section 75 still has you covered.
- You buy three pairs of shoes costing £180 in total and one of the pairs fall apart the first time you wear them: The shoes are only covered if that pair cost over £100 – if you buy several items together that come to more than £100, the only items that are covered are those that cost £100 or more on their own.
Can I Claim for Additional Costs?
As well as covering you for the cost of the item you can claim for ‘consequential losses’. This means that, if as a result of the problem you were forced to splash additional cash you can claim this back from the credit card company as well. For example, if you buy a second-hand car and it breaks down in the middle of nowhere on the way home from the garage forcing you to pay for roadside recovery and a taxi home, you should be able to claim for the cost of the rescue too.
Exceptions to look out for:
- Purchases through a third party – Card companies have got a bit of wiggle room if you’ve bought something via a third party, for example if you buy goods through Amazon marketplace, book a holiday via a travel agent or purchase items using an online payment processor such as PayPal or WorldPay. In these cases credit card companies can claim that as they didn’t have a direct relationship with the company selling the goods they’re not liable. But it is worth arguing the toss as your persistence may pay off – the Court of Appeal ruled in favour of a consumer in this instance in 2006. You may also find you are covered elsewhere. For example, with a package holiday you are covered for a full refund in the event of the tour company going bust under ATOL.
- Purchases made by an additional cardholder – If someone else has an additional card on your credit card account, anything they buy may not be covered. In order to make a successful claim under Section 75 you will have to prove that the item provided some benefit to the primary cardholder. So, if your partner bought a family car with their card you’re covered, but if they bought themselves a spa break for one you are not.
- Cash withdrawals – Taking out cash on a credit card and using the cash to pay doesn’t give you Section 75 protection – and it’s an expensive way to shop.
Which Credit Card Should I Use?
EVERY credit card comes with section 75 benefits so the card to use is whatever card is best for you for other reasons.The great thing about section 75 is that it covers purchases made with any credit card. There are no exceptions. Use our credit comparison table to show the cards that will deliver you most benefit and that are likely to accept you.
How to Make a Claim
- Contact the retailer: While your credit card firm is “jointly liable” in the eyes of the law, it is usually far easier to get a refund from the retailer. If the retailer has gone bust, isn’t responding to you, or is in a land far, far away then it’s time to get in touch with your credit card company. This means the company that issues your credit card not Visa, Mastercard or American Express. For example, if you have a Barclaycard Visa you need to make a claim with Barclaycard not Visa.
- Call your credit card provider: Tell them you want to make a claim under Section 75 of the Consumer Credit Act. If the person you are speaking to tries to blind you with talk of procedure make it clear that it is your legal right to claim under Section 75.
- Fill out a claim form: Your card company will provide you with a claim form to fill out. Make sure you state on the form that you are making a claim under Section 75 of the Consumer Credit Act.
Chargeback: the Debit Card Safety Net
It’s not just credit card users who benefit from extra consumer protection. If you paid for goods with a debit card you may be protected under rules known as ‘chargeback.’ This is offered by American Express, MasterCard and Visa, and there is no upper limit on the amount to claim. It involves asking your bank to reverse a transaction and refund money back into your account. It can be used if you have ordered goods that have not turned up, are damaged or not as described, or if you have paid for service you haven’t received. It can also be used if you’ve been a victim of fraud. Try to sort out your problem with the trader first, as this may be quicker and easier. But chargeback can be useful if the trader has gone bust or you just cannot get a response out of them. Just make sure you don't hang about before making your claim - you need to do it within 120 days of realising there is a problem. You should also be prepared to explain the process to bank staff, as many don’t know about it. Unlike Section 75, chargeback is not a legal requirement from banks - it's just part of the debit card provider’s rules. This means you aren't guaranteed to get your money back.
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