When using your credit card to purchase goods or services, you could be covered by something called Section 75.
What is Section 75?
If you use your credit card to buy something over £100 but less than £30,000, you are covered by Section 75 of the Consumer Credit Act in England, Scotland and Wales.
Your credit card provider has equal liability with the retailer if there is an issue with something you have bought or if the company you have purchased from fails and cannot provide a refund.
It covers goods and services that you pay for but don’t receive, or receive in a different condition to what was described to you at the point of purchase.
Holidays
A popular use for credit cards is to pay for holidays. This is because Section 75 covers:
- The cost of your flights if the airline goes bust
- The cost of your holiday if the holiday company goes bust
- Additional costs such as you having to buy more expensive flights to return home if the airline you originally booked with went bust
What if I Only Paid the Deposit with My Credit Card?
If you pay the deposit for something with your credit card, you are still protected for the whole cost of the goods or services you have paid for. You don’t need to pay the full price of an item by credit card to get the legal protection afforded to you under Section 75. It’s the price of the goods or services that matters, not the amount paid for on your card.
Example 1
You buy a sofa costing £1,000 but you only pay £50 of this on your credit card. When you receive the sofa it is badly damaged, despite you being told it was brand new in perfect condition. You are covered by Section 75 to claim the whole £1,000 back from the seller.
Example 2
You buy a pair of shoes that cost £60 and a coat that costs £80 from the same online retailer, spending £140 in total. You never receive these items in the post. In this instance, you are not covered by Section 75, because although your total bill is over £100, each of the items purchased is not.
Example 3
You buy a handbag from the retailer mentioned in Example 2 which costs £120, which you never receive in the post. You are covered by Section 75 because the cost of the individual good purchased is over £100.
Making a Claim
If you pay for something with your credit card that costs over £100 and there is an issue, the first step to take is to contact the person you bought it from. If they won’t reply or give you a refund, or if they have gone into liquidation and there is no point contacting them, you can then make a claim against your credit card company.
When making a claim you should go into as much detail as possible. You should:
- Explain to your credit card company that you want to make a claim using Section 75, and that you would like them to refund the purchase price of what you paid for to your credit card account
- Specify what you bought, where you bought it from, when you bought it and how much it cost
- Include copies of any receipts or proof of purchase
- Mention the efforts you have made to contact the company you purchased from and what the response has been, if any
- Include evidence of any attempts you have made to get money back from the retailer