Section 75 is your friend when things go wrong

I had a huge response to my recent column on the different ways to pay for things – and what happens if things go wrong. The majority of people getting in touch were asking about refunds, so here’s a closer look at a little bit of the law that gives you lots of power.

It sounds a bit legalistic, but section 75 of the Consumer Credit Act can help you get your cash back if you’ve paid for goods or services on a credit card. The law covers a huge range of problems, for example, if your online shopping doesn’t turn up, or the business that’s building your conservatory goes bust or you’ve been tricked into taking out a dodgy timeshare.

Here’s how it works

Paying for goods or services with a credit card (or certain other types of credit agreement), gives you statutory protection if something goes wrong under the Consumer Credit Act. This means that you can ask the card provider to give you a refund if the goods or services you’ve paid for don’t turn up or are ‘misrepresented’ (in other words, what you’ve been sold isn’t what you were told it would be).

It’s not all straightforward though. Claims made under section 75 have to meet certain criteria and are looked at on a case by case basis by the card provider.

How do I know if I’ve got rights under section 75?

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

This can involve goods not turning up, items that are damaged or don’t do what they are supposed to do or situations where you’ve been misled by the supplier. You don’t need to complain directly to the supplier either – but I’d strongly recommend you do. In fact, you can make the same complaint to both firm and card provider to save time.

You’re even covered if you’ve only paid for a deposit for something on your credit card – and in theory, that deposit amount can be under £100 as long as the total cost of the goods is between £100 and £30,000. In cases like this you’re still covered for the whole 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 the rest in cash, if the firm goes in to liquidation the card provider would in theory have to pay you the full £2,000. In fact, the wording around deposits is pretty unclear, so in theory, even if you’d paid a pound on deposit you might be covered.

The rules and the quirks

There are a number of other conditions that must apply before you make a claim:

The card provider must be based in the UK, though you can complain about purchases made to businesses overseas.

You are only covered if you buy direct from the supplier, not a third party. This interpretation of the law is enormously complicated, but in short if you pay via a third party (including Paypal, on some occasions) you may not be able to make a claim.

Debit card payments, cheques and transfers are not covered by the Consumer Credit Act, though you may be able to make a ‘chargeback’ if there’s a dispute with a debit card payment.

Find out more about the quirks in our special guide news.resolver.co. uk/claiming-a-refund-from-yourcredit-card-company-the-greyareas/

Over the last year, thousands of people have made section 75 claims to get back money from holiday firms, wedding venues and more. So paying by credit card can really be useful if you’re in a dispute with a firm. But as always with credit, pay the balance of the card off immediately to avoid paying more long term!