Section 75 – Important credit card purchase protection legislation
What is Section 75?
It’s part of the Consumer Credit Act 1974 that means your credit card provider is jointly and severally responsible for any breach of contract, faulty goods or misrepresentation by a retailer or supplier. It allows you to make a claim against your credit card company to get your full money back if a retailer or supplier lets you down and refuses to honour the contract properly – including if it goes bust.
How does it work?
The goods or service you bought must have cost over £100 but less than £30,000.
However, to claim under Section 75 you don’t have to have paid more than £100 or the full amount on your credit card – the card company is liable even if you made only part of the payment – perhaps a deposit – on your card.
For example, if you book a hotel costing £2,000 and pay a £60 deposit on the card and the rest by other means, you would be covered for the whole amount if the hotel went out of business and you didn’t get to have your stay.
What does Section 75 cover?
It covers a wide range of instances, here are some examples:
- You can claim if you order goods that don’t arrive or that are not in the condition described when purchased.
- It covers costs but there’s also an opportunity to claim for associated costs. So, if an airline went bust when you were on holiday and you needed to book new return flights to get home, these costs should be covered.
- It applies to foreign transactions as well as goods bought online, by telephone, or mail order for delivery to the UK from overseas.
- You can even claim if you have closed your credit card account.
- The law also applies to store cards.
What does it not cover?
- There must be a direct link payment to the company you’re claiming from for Section 75 to apply. However, PayPal can be an exception as it’s still possible to claim against the credit card company providing PayPal has a ‘Commercial Entity Agreement’ with them.
- Taking out cash on a credit card and using the cash to pay doesn’t give you Section 75 protection.
- There’s some small print on the minimum of £100 spend too. If you bought two items that together cost more than £100, but each cost less than £100, Section 75 would not apply.
- It doesn’t apply when an item is faulty but still under warranty with the manufacturer. You need to take that up with the manufacturer directly.
- Purchases using a debit card or bank transfer in total.
Section 75A
This section of the UK Consumer Credit Act 1974, offers protection where the purchase was over £30,000 but less than £62,260 and what is called a “linked credit agreement” was used to fund the purchase.
If the supplier of the goods or services has not performed the contract and refuses to refund your money, or has simply gone bust resulting in a contractual breach, then you are entitled to compile a claim against the finance company. For example, if you purchase a timeshare for £35,000 utilising a UK finance contract and the resort goes into liquidation, then Section 75A offers you protection for a full refund of monies paid and the cancellation of the finance agreement.