Section 75 – your free credit card purchase protection

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 or misrepresentation by a retailer or trader. It allows you to make a claim against your credit card company to get your money back if a retailer or trader 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 and not more 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 cheque or debit card, 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:

  • 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 against a now closed credit card account.
  • The law also applies to store cards.

What doesn’t it 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.

How can I claim?

A Section 75 claim should not be your first port of call.

You should always attempt to get a refund from the retailer you bought from beforehand.

  • If you have no luck retrieving your money, then it’s time for a Section 75 claim. Ask your bank for a claim form. Make sure that you specify with your credit card company that you wish to make a claim using Section 75, so there is no confusion.
  • Your claim should include as much detail as possible, including a description and evidence of the attempts you have made to get money back from the retailer.
  • It helps with a claim if you hang on to receipts.
  • If you are not able to resolve your issue with either your supplier or your credit card company, you have the right to contact The Financial Ombudsman Service which can independently assess the case. You have six months to take up a case with the Ombudsman from the time your claim is rejected.

What about my debit card or pre-paid cards?

Section 75 does not apply for payments made using these cards. However, there is another form of protection for debit and pre-paid cards called Chargeback.

This allows the card provider to reverse a payment you've made, as long as the card provider agrees that your complaint is legitimate.

Chargeback is a scheme devised by Visa, Mastercard and American Express - it is not a legal requirement like Section 75, so you’re not guaranteed to get your money back.

There are no minimum or maximum spend limits for a Chargeback claim, but there’s a time limit - you get 120 days from when you first notice a problem.

You can make a claim directly through the card issuer. You should be prepared to explain the Chargeback rule to bank staff, as many don’t know about it.