Learn about Section 75 and Chargeback protection and rights offered with credit cards
Section 75 is one of the benefits of making purchases for goods or services by credit card rather than by cash or cheque - you are protected by law if something goes wrong.
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This means that if the goods you purchased were faulty, damaged or were never delivered, then you can claim your money back though your credit card provider.
Section 75 - credit card rights explained
This payment protection is possible under Section 75 of the Consumer Credit Act 1974.
In summary, this useful bit of legislation means that your credit card provider and the trader you made the purchase from are equally liable if something goes wrong.
You can claim a refund, repair or replacement so long as the price of the goods or services you purchased were more than £100 and less than £30,000.
You will even be eligible for this consumer protection if you didn’t pay the total cost on your credit card.
For example, if you pay just the deposit with your credit card and the rest by cheque, you can still claim a refund or replacement under this legal protection.
This is so long as the total value of the product or service is over £100 (i.e. not including additional fees).
If something goes wrong with a card purchase
If something goes wrong with a purchase the first step is to contact the trader you bought the goods or services from, as they may be able to help you directly.
If you cannot contact them or if they have gone out of business then it’s time to get in touch with your credit card provider as they are jointly responsible under the act. Make sure that you keep track of any receipts to help the process run smoothly.
If your credit card company refuses your claim then you can refer the case to the Financial Ombusdman Service (FOS) who will act as an independent mediator and find a solution.
Payment protection exceptions
There are a number of reasons that you may not be able to claim:
- You used a charge card or a store card to make the purchase
- Your purchase was under £100 or over £30,000
- You used a company credit card
- You used credit card cheques
- The purchase was made through Paypal
Charge cards, unlike standard credit cards, require you to pay off the balance in full each month.
Meanwhile, store cards will offer you protection, but may have slightly different terms and conditions for purchases made in their store.
Paypal claims to offer consumer protection, but this is not in accordance with the law – it is actually their own company policy, so you'll be leaving your protection up to their discretion.
What to do if your claim is refused
If your credit card company refuses your claim then ask them for a ‘letter of deadlock’ to send to the Financial Ombudsman Service (FOS) who will independently resolve the issue.
If you don’t receive a reply from the provider within two weeks then you can contact the FOS directly to file your compliant.
If the purchase was under £100
Section 75 will only protect you if the purchase was between £100 and £30,000 and so you are not protected by law if it was under £100.
In this scenario you may be able to turn to a Chargeback scheme. This is when your bank will contact the trader’s bank to claim the money back for you.
However, this is not a legal requirement but a scheme run by Amex, Visa and Mastercard and so it’s not as watertight as the payment protection under Section 75.
The good news is that there’s no maximum limit on the refund (only Mastercard has a minimum of £10). To qualify you must contact you card provider within 120 days of the transaction.
Chargeback - Protection when using a debit card
You don’t get quite the same protection when using a debit card as you do when using a credit card under Section 75, but you may still be able to claim a refund for faulty or damaged goods, or if they were never delivered.
This will only be possible if your bank has taken part in a Chargeback scheme.
This is where your bank will contact the trader’s bank on your behalf to request a refund back into your account. There is no maximum or minimum to how much you can claim.
Unfortunately there are no guarantees with this method – if the trader has gone out of business then you may not get your money back.
You will also only be able to claim a refund as you cannot request a repair or replacement for the damaged goods.