How spending just 1p on a credit card can save you thousands if a sale doesn’t go through

Consumer rights expert Martyn James explains everything you need to know about Section 75 protection and how you don’t have to use a credit card to complete your entire purchase to get your money back

We explain how Section 75 works
We explain how Section 75 works

The last few years have been carnage for consumers as we struggled to get refunds, wrestled with busting companies and failed to get other companies to act on our complaints.

However, if you’re smart – and have a bit of discipline – then there’s a payment method that will help you avoid all of this hassle and give you an extra level of projection when things go wrong.

If you pay for goods or services with a credit card, the Consumer Credit Act can come to your rescue if something goes wrong.

It sounds a bit legalistic, but Section 75 claims will help you get your money back from the card issuer.

In addition, these claims cover a variety of issues, e.g. B. if your online purchase doesn’t show up, or the business building your sunroom goes bust — or even if you’ve been tricked into taking out a shady timeshare.

That’s how it works.

Section 75 explained

There are many ways to pay for things when you go shopping. But whether you’re online or on the high street, you have certain rights when paying by credit card that you don’t have when paying by other methods.

Paying for goods or services with a credit card (or certain other types of credit agreements) gives you legal protections.

This means you can ask the card issuer for a refund if the goods or services you paid for don’t show up or are “misrepresented” (in other words, what you were sold isn’t what you were told it would be).

However, not everything is easy. Section 75 claims must meet certain criteria and will be assessed on a case-by-case basis by the card provider.

Know your rights when shopping online


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How do I know if I have Section 75 rights?

If you pay for goods or services with a credit card that cost between £100 and £30,000, the credit card issuer is jointly responsible with the supplier of the goods or services for any breach of contract or misrepresentation.

This can mean goods not appearing, items damaged or not doing what they are supposed to do, or situations where you have been misled by the supplier.

You don’t have to complain directly to the supplier either – although I strongly recommend that you do.

You’re even covered if you’ve only paid a deposit for something using your credit card – and theoretically that deposit amount can be as little as £100 (in theory even as little as 1p) as long as the total cost of the goods is between £100 and £30,000.

In such cases, you are still insured for the full value of the item in question.

So if you pay a £100 deposit for a sofa that costs £2,000 on your credit card and you paid the rest in cash, theoretically the card issuer would have to pay you the full £2,000 should the company go into liquidation.

The rules and the quirks

There are a number of other conditions that must be met before you can make a claim:

  • The card provider must be based in the UK, but you can complain about buying from companies overseas.
  • You are only insured if you buy direct from the supplier, not a third party. This is called the debtor-creditor-supplier relationship and is enormously complicated. If in doubt, complain anyway.
  • Debit card payments, checks and wire transfers are not covered under the Consumer Credit Act, although you may be able to issue a “chargeback” if there is a dispute with a debit card payment.
  • Although Section 75 of the Consumer Credit Act is a great piece of legislation when it comes to consumer rights, it’s still open to interpretation. While it makes sense to pay for items with a credit card, it doesn’t guarantee you’ll get your money back if something goes wrong.

Other forms of payment and associated rights

None of the following payment methods fall under Section 75.

  • Cash: Cash is on the decline but is still one of the most popular ways to pay for goods, but if something goes wrong there’s no audit trail to investigate. So you must keep your receipts. If you make an important purchase, photograph your receipt and email it to yourself so you can keep it — just in case. This also helps if you need to make an insurance claim for damaged or stolen items.
  • Check: A lot of people think checks are dying out, but millions are still being written each year. Checks work using the “clearing system” – which is well over a century old. Although the rules have finally been updated and you can usually get the money the next business day, the new process is a bit more confusing – and checks can still bounce.
  • Loyalty card: Loyalty cards are good to get 10% discount on goods when you take out the card for the first time, but pay for it immediately and cut it off. Interest rates are often extortionate and they are an added complication when it comes to managing our finances.
  • Debit card: Section 75 doesn’t apply to debit cards, but card providers offer a similar system called “chargeback.” Chargeback means you can ask your bank to give you a refund if you dispute a transaction (if you didn’t make or authorize it). Chargebacks are not a legal right and timeframes vary when it comes to how long you need to make a request – so don’t hesitate. While it’s not designed to resolve disputes between you and a retailer, it’s worth asking your bank for help. And there is no upper or lower limit. Confusingly, some credit card companies will try to “charge back” your cash first – but you can still make a Section 75 claim if that doesn’t work.
  • Wire Transfer: You should never transfer money to anyone except someone you know or trust. As soon as you click send, the money is gone. So if you entered the wrong number – or worse, got scammed by a scammer, you could lose everything. Be careful.
  • Electronic Money: In recent years, sites like PayPal have allowed you to transfer money electronically. They have their own buyer/seller systems that help mediate disputes about a sale, and failing that, to the Treasury Ombudsman. However, they are considered a third party under current law, so using a credit card to pay through PayPal could mean you are not covered by Section 75.

A few other quirks

However, nothing in life is ever easy, is it?! The Consumer Credit Act is fabulous, but there are some quirks to be aware of.

You have to buy directly from the supplier of the goods or services – but here the law has not kept up with the way we live today.

For example, if you use PayPal, it’s theoretically a third party, so you can’t make a Section 75 claim (although it can

partly controversial).

Another example is using an online vacation marketplace to buy a flight and vacation.

Since they don’t provide the flight and hotel, you probably can’t make a claim either.

It’s a bit rubbish. As with anything, some things we buy don’t live up to expectations.

So how about if you’re sold a timeshare that isn’t as advertised (or built) — or you paid for a poorly equipped kitchen?

The good news is that you can make claims, but investigations can be complex. If in doubt, complain!

One last thing…

If you buy with a credit card, you pay the balance immediately or as soon as the transaction appears on your invoice.

Interest in credit cards is high and it’s easy to get into trouble. I lock my cards in a drawer so I’m not tempted to squander them.

Discipline is tough, so stay strong!

Martyn James is a leading consumer rights activist, television and radio broadcaster and columnist.

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Fry Electronics Team

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