Credit card purchase protection
Section 75 of the Consumer Credit Act can offer you purchase protection if you spend on your credit card. Read our guide to what credit card protection can cover.
Section 75 of the Consumer Credit Act can offer you purchase protection if you spend on your credit card. Read our guide to what credit card protection can cover.
What is credit card purchase protection?
Credit card protection could help you to claim your money back if you use your credit card to buy something and there’s a problem with it – like if the company goes bust or you order an item that either doesn’t arrive or arrives damaged or faulty.
Section 75 is a UK protection regulation that comes under the Consumer Credit Act of 1974 and applies to all types of credit card. In certain cases it allows the cardholder to get a full refund from their credit issuer on single purchases that cost between £100 and £30,000.
Need to knowSection 75 might only offer protection in certain cases. Whether you can make a successful claim depends on the circumstances, the terms and conditions of your credit card provider, and the Mastercard, Visa or American Express scheme rules. Every case is individual, so don’t assume you’ll be automatically covered.
What does Section 75 of the Consumer Credit Act cover?
Under Section 75 of the Consumer Credit Act, your credit card provider has equal responsibility with a seller if something goes wrong after you’ve paid for something. Your card provider may refund you, the cardholder, if:
- An item isn’t delivered to you but you’ve still been charged.
- The item you bought is faulty or damaged and the company won’t refund you or offer a replacement.
- Your item arrives and it isn’t what was described.
- The company goes into administration before you’ve got the item you’ve paid for.
- You’ve bought flights or a holiday with an airline/tour operator that later goes into administration and is unable to refund your tickets.
- You’ve paid for transport and accommodation for an event that is then cancelled.
- The purchase is more than £100, but less than £30,000.
You don’t necessarily need to pay more than £100 towards a purchase on your credit card, provided that the total cash price of the good or service you’re buying is over the £100 threshold. So if, for example, you paid a £50 deposit for a new £500 sofa and then paid off the remaining amount with your debit card, you may have purchase protection under Section 75 for the full cost of the sofa, and not just the deposit, if the retailer then goes bust and fails to deliver.
What is not covered by Section 75 of the Consumer Credit Act?
You might not be covered by credit card protection if:
- Your purchase is worth £100 or less, or over £30,000.
- You used a third-party provider such as PayPal, Worldpay or Google Wallet, to pay instead of buying directly. Section 75 usually only applies when payment is made directly to the goods or service supplier, not through third parties. Similarly, if you buy a holiday through an agency like Expedia, or you buy concert tickets through a ticket-selling platform, you should read the terms of the provider’s own buyer protection scheme carefully before you buy.
- You paid using a debit card or charge card.
- You withdraw cash using your credit card.
- Items priced under £100, even if part of a purchase totalling over £100. For example, if you bought three tickets for £90 – paying £270 in total – they won’t be covered. This is because the single item is under £100.
- The purchase was made by an additional cardholder. To be covered, you might need to show that you as the primary cardholder will benefit from the purchase. So for example if the additional cardholder used the card to buy you a birthday present, it might be covered, but a pair of designer shoes they’ve bought for themselves might not be. In the case of expensive purchases, it might be wiser to get the main cardholder to pay as they’re more likely to be covered.
- You use your card for money transfers or other indirect forms of payment, such as vouchers bought from a third-party supplier. For example, an H&M voucher bought at the supermarket.
Hire purchase (HP) isn’t covered under Section 75, but the supplier still has obligations under the Supply of Goods Act to make sure goods they sell are not faulty and are as described – so you may still have some protection.
Will overseas purchases be protected?
Yes, Section 75 of the Consumer Credit Act applies whether the purchase is made in the UK, abroad or online. You should get the same type of protection, as long as the purchase meets the criteria set out by your credit card provider.
Do credit cards protect holidays and flights?
If you booked a holiday or flight directly with a tour operator or airline, you should be covered by Section 75. But Section 75 doesn’t usually apply if you book through an agent, such as Expedia, for example.
When it comes to flights only, you’ll need to buy your tickets directly from the airline and each booking must cost over £100 to qualify for Section 75 protection. Just be careful if you’re using a low-cost airline, as each leg is considered a single booking. This means that both your outbound and inbound flights must each cost more than £100 to qualify.
It’s not 100% guaranteed that you’ll be covered by Section 75 or your claim will be successful, so make sure you have travel insurance in place before you go.
Will group bookings for tickets or holidays be protected?
If you’ve booked a holiday or tickets to an event on behalf of a group, then technically you should be covered, so long as each individual ticket cost more than £100 and you meet all the other criteria. However, there might be an argument that flights, reservations or tickets under other names aren’t covered by your credit card protection, even if the people you’ve bought them for are paying you back separately for their tickets. Those people may not get their portion of the total back.
If you’re concerned or in any doubt, just ask your group to book individually, or in the case of holidays, you could look at group travel insurance.
Are cash withdrawals covered by Section 75?
No, if you use your credit card to make a cash withdrawal, the money you spend won’t be covered by Section 75. This is because there’s no link between the credit card provider and the retailer.
It’s a good idea to avoid using your credit card for cash withdrawals anyway, as you’re likely to be charged a fee and interest from the moment you take the money out.
What is credit card deposit protection?
Credit card deposit protection is for products or services you’ve paid a deposit for, but the company then fails to fulfil their promise. For example, the promised goods don’t arrive or the service or event is cancelled.
Common examples include deposits paid towards a holiday, when the airline or tour operator later goes bust. Another example would be if you pre-ordered a specific product with a deposit, but then the product wasn’t released or the company went bust. In these cases, you may be able to recover your lost deposit through your credit card provider under Section 75.
Can you have additional purchase protection on a credit card?
Some credit card providers offer premium accounts or services that may protect you for larger amounts. These services vary between providers.
Other legislation, which protects purchases with linked credit agreements over £30,000, comes in the form of Section 75a of the Consumer Credit Act. This can cover a higher limit of £60,260, but the regulations are stricter. This form of protection doesn’t apply to credit cards, but instead covers other credit agreements – for example, an expensive car (costing over £30,000) bought as part of a finance agreement through an official car dealer. To get this protection, you must also have tried to resolve the issue with the product or service provider directly, but with no success.
What debit card payment protection is there?
Debit cards don’t offer payment protection under Section 75 of the Consumer Credit Act, but they are covered by something called chargeback. Chargeback could cover you if an item you’ve bought is damaged, faulty or doesn’t arrive.
There is usually no minimum spend required for a debit card purchase to be covered by chargeback, but there are time limits. You’ll typically have 120 days from the date of the transaction to contact your bank to make a claim. You’ll also be expected to provide evidence that the item is damaged, faulty or didn’t arrive, along with proof you bought it.
Unlike Section 75, chargeback isn’t legally binding and your bank doesn’t share joint liability with the seller. When you make a claim, your bank will put in a request to the seller’s bank to claim back the money. The company can always dispute your claim, so there’s no guarantee that your bank will get your money back.
How do you claim money back on credit cards?
To make a Section 75 claim on your credit card, you should first contact the retailer or company that you bought from to give them an opportunity to make it right. If they don’t get back to you or offer a refund, you can make a claim from your credit card provider – in other words, the card issuer. So for example, you’d claim from Barclays, NatWest or whoever your credit card provider is, not the payment network - Visa, Mastercard or American Express.
When you contact your credit card provider, you’ll need to state that you’re making a claim under Section 75 of the Consumer Credit Act, explain what has happened and indicate what you’d like them to do. Any claim must be made by the primary cardholder because they’re the one who signed the original credit agreement with the bank.
Depending on the situation, you could ask them to refund the purchase price of the item into your credit card account, or to cover the money you’ve spent on repairing a damaged item. In some cases, if you bought a faulty item and it caused further damage to your property or possessions, you could claim for both the cost of replacing the original item and the cost of repairing or replacing your damaged possessions.
You’ll need to include copies of any receipts as proof as purchase. You’ll also need to include any emails or letters you’ve sent to the retailer or company you bought from. And keep copies of any correspondence you send to your credit card provider too, in case you need to take it further. Just bear in mind that it’s never 100% guaranteed your claim will be successful.
How long will it take to receive the money after a claim?
There’s no legally binding time limit for how long it should take your card provider to investigate and resolve your Section 75 claim. It depends on the resources available at your credit card provider to look into your case.
If you’re unhappy with how long it is taking, you can make a complaint to your credit card provider, and they have a responsibility to respond to your complaint within eight weeks. If they don’t, you can complain to the Financial Ombudsman.
Is there anything I can do if my Section 75 claim is rejected?
If your credit card provider refuses your Section 75 claim, you still have options. If you believe you have a strong case, you can ask your credit card provider for a letter of deadlock and make a complaint to the Financial Ombudsman within six months of your claim being rejected. They will look into all the evidence in your case and make an independent judgement.
If the Financial Ombudsman decides in your favour, they can compel your credit card provider to make it right. Bear in mind though that there is no guarantee that your claim will be successful.
What is the Financial Ombudsman Service?
The Financial Ombudsman Service (FOS) is an official, independent body set up by Parliament to settle complaints between consumers and financial businesses. The FOS will decide if a customer has been treated unfairly and has the legal power to step in and put things right.
The FOS is a free service available to all UK consumers and is totally impartial. Its job is to listen to both sides of the story, weigh up the facts and tell you and the business what can be done to put things right. If you or the business don’t agree with the FOS assessment of your case, the FOS has the power to make a legally binding final decision.
You should only take your complaint to the FOS if you can show proof that you’ve first tried to settle the dispute with the retailer or credit card provider. If the provider refuses your claim or you haven’t heard back from them within eight weeks, you can then take your complaint to the FOS.
You can contact the Financial Ombudsman Service via email or by filling out an online form. Alternatively, call 0800 0234 567 between 8am and 5pm, Monday to Friday or 9am and 1pm on a Saturday.
How to protect yourself when using your credit card
It’s a good idea to use your credit card for big purchases, so if anything goes wrong you can try to claim back any losses through Section 75 of the Consumer Credit Act. Remember that you won’t be protected by Section 75 for purchases made with third-party providers, so make sure you check if they have any buyer protection scheme of their own in place and consider if you might be better off buying directly with the retailer or trader.
Bear in mind that even with Section 75 there are no guarantees when it comes to getting your money back, and when it comes to credit card fraud and other consumer credit issues, the best offence is a good defence.
How to protect yourself against scams:
It pays to be vigilant whenever you use your credit card. Always keep your card in sight when you’re using it and never share your PIN or credit card details with others. There are numerous scams that criminals can use to rob us of our hard-earned cash. Here are a few things to watch out for:
- Phishing: be extremely wary of any texts, emails, and phone calls claiming to be from your bank. Fraudsters can create alarmingly convincing replicas. Don’t click on any links included on these emails, or enter any personal information, including your credit card details. Similarly, criminals can create replica websites that mimic the real one so accurately that it can be hard to tell from first glance. Keep an eye out for anything that doesn’t look quite right – like spelling mistakes, a weird URL or design differences – and if in doubt, trust your instincts.
- Secure communication: only communicate with your bank through secure channels that use passwords or identity protection. If you need to call your bank to confirm whether an email or text is accurate, look up the phone number independently – don’t ring any phone numbers included on the potentially fraudulent email or text. And if someone calls you claiming to be an employee from your bank, don’t give out any personal information. Call your bank directly using an official number and verify it’s a real call.
- Public WiFi: avoid using open public WiFi networks for any sensitive or confidential tasks, such as logging into your online banking. These networks are often unsecured, which means hackers have a better chance of intercepting your communication.
- Lost/stolen credit cards: with contactless cards the norm, criminals don’t even need to know your PIN to go on a mini shopping spree with your misplaced or stolen credit card. As soon as you realise your credit card is missing, contact your bank and ask them to freeze your card.
- Transaction alerts: if available, it’s a good idea to set up transaction alerts on your card so you can see any payments that are made in real time. If a payment comes up that you don’t recognise, contact your bank immediately to freeze your card.
- Card skimming: criminals can fit devices to ATMs that can clone your card, so look out for unusual devices around the card slot and if in doubt, use another machine. Similarly, it’s not unheard of for employees at shops and restaurants to use devices to clone your card when you go to pay, so never let your credit card out of your sight!
- ID theft: we reveal a disturbing amount of our personal information online and criminals can use that against us. Be very careful what you share on social media and get into the habit of shredding any sensitive information, such as letters containing personal details, receipts or bills.
Can I compare credit cards with protection?
As credit card protection is a legal requirement under Section 75 of the Consumer Credit Act, you won’t need to compare credit cards based on this protection. All credit card providers are required to meet these standards.
However, if you’re looking for additional protection, you may be able to find this with certain premium credit card services. This is worth considering if you’re likely to make purchases over the £30,000 limit for credit card protection.
Frequently asked questions
How much does credit card protection cost?
Nothing - credit card protection is your legal right as a consumer, so you don’t have to pay for it. But don’t just get a credit card for Section 75 protection – it may not always apply.
What should I do if a retailer or supplier has gone bust?
If the retailer or supplier has gone bust, your next step will be to contact your credit card provider. You need to tell them you’re making a claim under Section 75 of the Consumer Credit Act.
If you can’t come to an agreement with your credit card provider and you feel your case hasn’t been dealt with fairly or reasonably, you should contact the Financial Ombudsman, who will look into your complaint.
What can I do if the retailer won’t pay the bill?
If the retailer hasn’t gone bust but is refusing to co-operate, try contacting your credit card provider to make a claim through Section 75. If your credit card provider rejects your claim, you can request a letter of deadlock and take your complaint to the Financial Ombudsman. It’s a free service and could save you the cost of taking your case to the small claims court.
Is there a time limit on making a Section 75 claim?
You can make a Section 75 claim for up to six years from the date of the credit card purchase.
Am I not protected for credit card purchases under £100?
You’re not protected by Section 75 for credit card purchases for items under £100 but you may be able to request a refund from your credit card provider under the Chargeback scheme if you’re unable to get a refund directly from the retailer.
Chargeback covers debit and credit card purchases, but unlike Section 75, it’s not legally binding. Your credit card provider may or may not subscribe to the chargeback scheme. If they do they may, based on the evidence you provide, attempt to get a refund from the retailer’s bank, but there is no guarantee that your claim will be successful.
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