When it comes to credit card transactions, Section 75 of the Consumer Credit Act 1974 is a significant safeguard. Providing consumers with protection on credit card purchases between £100 and £30,000, s.75 gives financial security when shopping. This article takes a closer look at this important consumer protection.

What is Section 75?

S.75 of the Consumer Credit Act 1974 (the “CCA”) makes credit card issuers jointly liable with retailers for any breaches of contract or misrepresentation during a credit card transaction. This means that a consumer can potentially claim a refund from their credit card company, as well as the retailer, where they have used their credit card to purchase goods or services. 

Joint and Several Liability

One of the key aspects of Section 75 is the concept of joint and several liability. This means that both the retailer and the credit card company are responsible for providing the refund. Consumers can choose to claim from either the retailer, the credit card company, or both, depending on their preference or the circumstances of the case.

How can you be protected under Section 75? 

To be eligible for s.75 protection, certain conditions must be met:

* The price of the goods or services paid for must be above £100 but below £30,000. 

* The payment must be made either in full or in part using a credit card.

* There is a 6 year time limit for making a claim

Interestingly, only part of the payment needs to have been made by credit card. If you pay an initial amount on a credit card that is then topped up by a debit card payment, the full amount will be protected, not just the amount paid via a credit card. You may also be able to claim for any losses incurred exceeding the original amount paid.

s.75 provides protection in a number of situations, including:

* Faulty Goods or Services: If a purchased item is defective, not as described, or doesn’t fulfil its intended purpose, Section 75 allows consumers to seek a refund from the credit card company.

* Non-Delivery: If goods were not delivered as promised or not delivered at all, consumers can claim a refund.

* Merchant Insolvency: If the retailer goes out of business or files for bankruptcy, consumers can seek compensation from the credit card issuer.

What are the limits to a Section 75 claim? 

The payment must be made either in full or in part using a credit card in order for s.75 to apply. If you paid the full amount via a debit card or cash, none of this amount will be recoverable under s75. 

It is also important to note that not all transactions are covered by s.75 of the CCA. For example, the following may not be eligible for protection: 

* Any purchases of land. 

* If you are hiring an item e.g., hire car. 

* Goods or services purchased through a ‘middleman’ or a ‘go between party’, eg. a booking through a travel agent.

* cash withdrawals and payments made by cheque.

Everyday examples of when s.75 could apply

* If you bought a ticket for an airline company but prior to flying with them, the airline went into liquidation. 

* If you paid a £1000 deposit on a new bathroom and the bathroom company became insolvent before you received your bathroom. 

* If you ordered a hot tub and the company went into administration before you received it. 

* If you ordered some goods from overseas that were paid for and failed to arrive. 

What can you do if you paid solely via a debit card, or the amount is under £100? 

If you paid by cash / debit card, or if the amount is under £100, you won’t be protected under s75. However, you may be able to make what is called a chargeback claim, which is a mechanism for your card provider to reclaim money from the retailer’s bank. This is not a legal right but may be issued because of an agreement between the card issuer and the card scheme, for example VISA and Mastercard. There is however a time limit, and the chargeback must be raised before 120 days since the transaction was processed or the good/services were expected to be received. 

To bring a chargeback claim there must be a disputed transaction, for example, the consumer never received the goods. The consumer should attempt to contact the retailer as a first port of call. as this is likely to be the easiest way to resolve the issue. However, if this doesn’t work, the consumer can contact their card provider who in turn can put in a request to the retailer’s bank. A chargeback claim isn’t as strong a protection as s.75 and it doesn’t guarantee money back, but it is still a useful consumer tool.

Final Thoughts

Section 75 provides a legislative safety net for credit card users. It is therefore sensible to use a credit card for larger purchases wherever possible as it improves the chances of getting money back if things go wrong. Remember, it’s always wise to read the terms and conditions of your credit card agreement and stay informed about your rights as a consumer.

How can we help? 

At Bailoran we specialise in high value debt recovery. If you think s75 could apply to you with regards to the purchase of a good or service, please feel free to get in touch and we would be happy to advise you on this. 

It is also important to note here at Bailoran we want to do what is most cost effective for you as the client. Therefore, if you have a dispute regarding a small sum, you may want to explore pursuing a small claim. For further information on small claims, please click here.

This article does not constitute legal advice. If you need any help or further information in relation to s.75 claims, debt recovery, or any other legal issue, please contact us on 0113 266 0735 or at info@bailoransolicitors.com to speak to one of our legal experts.