Section 75 and credit card protection
Whether you’ve heard of section 75 or not, you might not know what is it or how it works. Section 75 is part of the Consumer Credit Act and it can off you purchase protection when you spend on your credit card.
What is credit card protection?
Credit card protection can help you to reclaim your money if you use your credit card to purchase something and there’s a problem. Whether that problem is the company you purchased the item from goes bust and cannot fulfil the purchase, or the item you’ve ordered simply doesn’t arrive.
The Consumer Credit Act of 1974 contains protection regulation in the form of section 75. In some cases, Section 75 enables cardholders to get a full refund from their credit issuer on single purchases that cost between £100 and £30,000. This protection comes with any type of credit card.
What’s covered under section 75?
Due to section 75 of the Consumer Credit Act your credit card provider has equal responsibility with the seller after you’ve paid for something if anything goes wrong. Your card provider may refund you if:
The purchase is more than £100, but less than £30,000
You’ve been charged for an item that wasn’t delivered
The item purchased is faulty or damaged and the seller won’t refund you or provide a replacement
Your item arrives and it isn’t as described
The company goes into administration before you receive the item you’ve bought
You’ve paid for flights or a holiday with an airline/tour operator that later goes into administration and is unable to refund your tickets
You’ve paid for transport and accommodation for an event that is then cancelled
What’s more, if you’ve used your credit card to pay a deposit of more than £100 for a single item, your payment protection may extend to the full purchase price, not just the deposit.
Does section 75 cover overseas purchases?
Yes - regardless of whether the purchase was made in the UK, abroad or online it’s covered under section 75.
What isn’t covered under section 75?
Purchases made that are £100 or less, or over £30,000
You used a third-party provider such as PayPal, instead of buying directly. Section 75 typically only applies when a payment is made directly to the supplier
The purchase wasn’t for a single item. I.e. you’ve purchased event tickets and your transaction value was £150 - this purchase won’t be covered by section 75 because the individual items (each ticket) was less than £100
Purchases made by an additional cardholder. Under section 75 the primary cardholder will need to show that they themselves will benefit from the item (or service) purchased in order to be covered.
Money transfers or other indirect payments. Meaning, if you withdraw cash using your credit card or transfer some of your balance to your bank account and make a purchase with that money it isn’t covered.
Similarly, while vouchers (valued over £100) are covered under section 75, if you purchase the voucher from a third party it isn’t covered.
The credit card provider and supplier are the same – section 75 requires a three-party relationship between the consumer (you), the lender (your credit card provider) and the supplier (the company you’re purchasing from).
Does section 75 apply to cash withdrawals?
No. If you withdraw cash using your credit card and make a purchase with that cash it isn’t covered because there is no link between the retailer and your credit card provider.
Typically, it’s a good idea to avoid using your credit card for cash withdrawals anyway as you’re likely to be charged a fee and interest for doing so.
How much does it cost?
As a consumer, credit card protection is your legal right. Meaning you don’t have to pay for it. But as it doesn’t always apply, don’t just get a credit card for section 75.
Making a claim under section 75
To make a claim under section 75 on your credit card, you first have to contact the retailer or company you purchased from. If they’re unable or unwilling to offer a refund you can then make a claim from your credit card provider.
When contacting your credit card provider, you need to state that you’re making a claim under section 75 of the Consumer Credit Act. You’ll also need to provide copies of receipts for proof of purchase and any emails or letters you’ve sent to the retailer you made the purchase through.
Just remember, it’s never guaranteed that your claim will be successful.
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