Section 75: Credit Card Protection You Need To Know
Section 75 of the Consumer Credit Act means your credit card provider must protect purchases costing over £100 and up to £30,000.
Credit cards aren’t just good for spreading the cost of expensive, big-ticket items such as furniture or a holiday. In fact, there’s a very good reason to use them to pay for as many of your purchases as possible. And that reason is protection.
When you pay for goods and services with a credit card, you’re not instantly spending your own money. Your bank account isn’t being accessed. Instead, the credit card company is picking up the tab and will bill you for it later.
So if your payment details were to get hacked, it’d be the credit card company’s money at risk. Not yours. This makes credit cards a really sensible way of paying for purchases online too.
And as long as you pay off your credit card bill in full each month, or spread the payments while you have a zero percent interest rate on your card, you won’t pay a penny for this protection.
Credit cards also offer you more specific consumer protection in the form of Section 75 of the Consumer Credit Act.
What is Section 75?
Section 75 of the Consumer Credit Act 1974 is a law that makes credit card companies ‘equally liable’ if their customers have a problem with the things they buy using their credit card, or the company they bought them from.
It applies to purchases costing over £100, up to a maximum of £30,000. And even if only a deposit was paid using the credit card, the entire purchase is still covered by Section 75.
What does Section 75 do?
Section 75 of the Consumer Credit Act means your credit card company can refund your money – and in some cases pay out for any expenses you incur should you have trouble with a seller.
Who is protected by Section 75?
All primary card holders are fully protected by Section 75 for purchases made on the credit card of over £100 but not more than £30,000, or for deposits for purchases costing between those amounts – even if the deposit is less than £100. A secondary cardholder may be also protected but it’s down to the card company’s discretion – make sure you check your card’s policy when you open the account.
How does Section 75 work?
There are lots of different scenarios you might experience for Section 75 to come through for you. You might discover a fault with an item you purchased, or perhaps on delivery it wasn’t as described. Maybe your purchase didn’t arrive after ordering online, or the seller went bust before it could provide the item or service you paid for. In any of these situations, once notified, your credit card can refund any money you paid out.
How to make a Section 75 claim
To get your money back under Section 75, there’s a process you must complete. The first thing you need to do is try to contact the seller to give it a chance to rectify the problem.
If that fails, then it’s time to contact your credit card company’s customer services and inform them you are “making a claim under Section 75 of the Consumer Credit Act”. The simplest way to do this is to phone them – usually on the number printed on the back of your credit card but you can write or send an email if you prefer.
You will be asked to state what you bought, from whom you bought it, when you made the purchase and how much you paid.
You’ll also likely need to confirm that you’ve tried to contact the seller and explain what, if any, response there was.
There’s no time limit set for your credit card company to refund your money but if you’re unhappy with how your credit card company is treating you, you can file a complaint with the Financial Ombudsman Service which can force it to respond and act.
How is Section 75 protection different to a chargeback?
There is another form of protection offered by payment cards called a ‘chargeback’. Unlike Section 75, it’s not a legal obligation on card companies – instead it’s a voluntary scheme that American Express, Mastercard, Maestro and Visa have agreed to.
It enables customers to claim for a refund on purchases of any amount of money that were made on debit, credit or prepaid cards should something go wrong.
There is a time limit for claiming a chargeback, which varies between 45 and 120 days depending on the card. However, there isn’t normally a minimum amount of money you need to spend to be eligible.
Once the card company receives your claim, it will investigate and try to give you your money back by reversing the transaction you made from your card to the seller. But as it’s just a -voluntary scheme, there’s no guarantee your money will be returned.
So, if you paid on a credit card for something priced at over £100 but not more than £30,000, and something goes wrong with your purchase, always make a Section 75 claim.
» MORE: Chargeback: How To Protect Credit and Debit Card Purchases
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Laura Whitcombe is a freelance journalist, campaigns consultant and co-author of Money Made Easy 2015/16 published by Harriman House. Read more