Section 75 explained

What is section 75 protection?

Section 75 is part of the Consumer Credit act 1974, which states that a credit card company is jointly liable for any breach of contract or misrepresentation by the retailer or trader.

But what does this actually mean?

Well, having section 75 means that if you’ve bought a product or service using a credit card, and something goes wrong, such as not receiving the goods or services or they arrive faulty, damaged or not as advertised, the credit card company must help you to get your money back.

Section 75 can also be used for products bought using a point-of-sale loan, such as a buy now pay later service.

Section 75 is only applicable when the credit provider is separate from the seller. So if your credit card is provided by the company that also provides the product or service, you can’t make a section 75 claim.

Section 75 can be extremely useful in scenarios where the retailer or provider of goods or services has gone into administration, and you have no hope of getting a refund from them. For example, if you’ve bought flights from an airline, and the airline goes into administration before you’ve been on holiday.

You don’t need to have tried to claim a refund from the retailer or trader first to be able to claim section 75. You won’t, however, be able to claim your money back from both your credit provider and the company you’ve made a purchase with.

Are there any limits to section 75?

In order to make a section 75 claim, the item or service you’ve purchased must cost between £100 and £30,000.

The credit card company is liable for the total cost of the item, even if you only paid a portion of it on your credit card. So even if you only put a deposit for an item on a credit card and paid the rest in cash, you could claim the full amount back from your credit card company if something goes wrong.

Section 75 is only applicable to individual items that cost over £100, so if you purchased multiple items that totalled over £100, but the individual items cost less than £100 each, you wouldn’t be able to make a section 75 claim.

There’s no time limit to making a section 75 claim, though it’s recommended that you do so within six years.

How do I make a section 75 claim?

If you want to make a section 75 claim, there are a few ways you can do so.

Some credit card providers will allow you to make a section 75 claim online or through their app. The way you do this can vary depending on the card provider. You can check with your card provider if you’re unsure.

You can also make a section 75 claim by writing to, calling or emailing your card provider. If you write to your card provider, it’s important to keep copies of any letters or emails you send for your own records or if you need to make a complaint.

In your letter or email, you should include:

• The name of the item or service you bought
• The retailer or supplier you purchased from
• The date you made the purchase
• The issue you have with the item or service, explain the problem
• What you’re seeking, such as a refund or the cost of repairs
• State that you’re making a claim under section 75 of the Consumer Credit Act 1974
• A timeframe in which you would like them to respond

There are lots of templates and tools available online if you’re still unsure what to include or how to word your letter.

What's the difference between the chargeback scheme and section 75?

The chargeback scheme is another port of call if you have a problem with a product or service; whilst there are no monetary limits for the chargeback scheme, you do have to make a claim within 120 days of your purchase.

The chargeback scheme is available on debit and prepaid cards, whereas section 75 is only available on credit cards. With the chargeback scheme, you will need to have paid the full amount of the purchase on your debit or prepaid card.

Another big difference between the chargeback scheme and section 75 is that card providers and issuers are not required to participate in the chargeback scheme; it’s voluntary, so not all card providers will offer chargeback protection. Whereas section 75 is the law and all credit card providers must step in if you’ve had an issue with a purchase using your credit card.

Can section 75 be refused?

Credit card companies can and do reject section 75 claims for a variety of reasons;

• You’ve paid through a third party and not directly to the trader
• An additional cardholder has made a purchase - this doesn’t always mean that you’re not protected by section 75, but can make it more difficult
• You’ve withdrawn cash using your credit card to pay for goods or services
• The item you’ve bought is faulty but still under the manufacturer's warranty
• You simply didn’t like the item or you’ve changed your mind - section 75 is only applicable if there’s a problem with the item or service, or it was misleadingly sold

If you feel your section 75 claim has been unfairly rejected or your credit company hasn’t responded to your claim within eight weeks, you can complain to the Financial Ombudsman Service.

They can order the credit card company to:

• Give you a refund
• Fix or replace the goods
• Arrange for services to be carried out to a better standard
• Refund any interest or charges you’ve incurred

In some circumstances, the Financial Ombudsman Service may also suggest that the credit card company pay you compensation for any trouble or upset they’ve caused.

You have six months from when your claim was rejected to complain to the ombudsman service.