A simples guide

Section 75 – Consumer Credit Act

You might not think that a specific section from a legal Act could be very interesting. And while it’s true that you may not want to spend a Sunday afternoon reading the small print, you should know that Section 75 could prove a very useful friend.

Introduced when the Consumer Credit Act became law over 40 years ago, Section 75 gives you valuable protection when you buy goods and services using a credit card.

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What does it say?

Section 75 makes your credit card company jointly liable for any breach of contract or misrepresentation by the company you brought goods or services from.

In plain English, this means that if something goes wrong with a purchase, such as:
- you’ve paid and the company goes bust
- the goods are faulty
- the goods don’t arrive

You have the right to put your claim to the credit card company as well as your supplier.

There are some financial limits to be aware of. Your item or service must be between £100 and £30,000 in value. It’s worth knowing that you’re still covered even if you didn’t put the whole £100 through your credit card though.

For example; you pay a deposit of £50 for a £300 dishwasher through your credit card. You then settle the balance of £250 by cheque. The company goes bust and doesn’t supply your dishwasher.

In this instance you can claim the whole £300 from the credit card company. They are as liable as the dishwasher provider.

How do I make a claim?

To make a Section 75 claim, you need to contact your credit card company. Note: this is the credit card provider not Amex, MasterCard or Visa. They should then send you a claim form. Don’t be worried if they try to tell you that the problem is the manufacturer's, not theirs: the law is quite clear that the credit card company is jointly responsible.

You can start a claim against both the company that didn’t supply you and the credit card company for the full value at the same time (though obviously you won’t be compensated twice).

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Does it just apply to credit cards?

No. Section 75 also covers most credit agreements. While credit cards are the main area covered, store cards, store credit and some finance arrangements are also included. Be careful though as Section 75 does not apply to hire purchase agreements.

What’s not covered?

Items outside of the value limits are not covered. The example that’s usually quoted to illustrate is for two single flights costing £99. While you might see this as a return trip for £198, Section 75 doesn’t. That’s two £99 items as far as the Act is concerned, and you’re not covered.

If you have an additional cardholder, you’ll need to demonstrate that the primary card holder has also been disadvantaged to make a claim. It’s safer therefore, to use the primary card when making larger purchases.

You’re unlikely to be covered when payments are made to a third party, that is, not the one that’s responsible for supplying the goods. The credit card company will argue that it didn’t have a direct relationship with the supplier in this instance.

This makes claims through things like PayPal, WorldPay, Amazon Marketplace or flights via a travel agent a lot more complicated and you would probably be best to avoid them altogether. In these circumstances you can still make a claim but it is likely to be harder work and may be contested. Check what secondary protections might exist. The payment processors all have their own refund systems and ATOL will help in some travel situations.

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