What refund can I get when using my credit card under section 75?

A key advantage of credit card purchases is the extra and free protection

One of the key advantages of choosing to pay for a product or service with a credit card is the financial protection it gives you if you need to request a refund, through something called Section 75 of the Consumer Credit Act.

Ever heard people talking about Section 75 and wondered what it is? And under what circumstances you are protected by it?

We've gathered together everything we think you need to know about the Consumer Credit Act.

In this article:

What is a Section 75 claim?
How does section 75 of the Consumer Credit Act protect me?
Is there a time limit on Section 75 claims?
How long does a section 75 claim takes?
How do I make a claim under section 75?
Am I covered under Section 75 for purchase made with a Debit card too?
What will I need to make a claim?
The cover loophole if a Third Party like Amazon or eBay is involved in the process
Can you claim under Section 75 if you've made a purchase with someone else's credit card?
When does section 75 NOT protect me?

You can also Download the template letter for Section 75 claims

It's important to understand what legal rights you have if you spend money on something that didn't turn out exactly how it should have done. From fake hotel websites claiming great deals for cheap holiday rentals to dodgy websites selling discounted and/or low quality products, it's easy to lose track of what's genuine in the digital world. Before you know it you've been scammed. It's true that the majority of people never have any problems using their credit card. However, you can never be too cautious. It's always good to know that you are protected if you accidentally find yourself in a sticky refund situation.

What is a section 75 claim?

Basically, when you purchase goods using your credit card, a law called the Consumer Credit Act gives you rights to request a refund from your supplier under certain circumstances. Rights that are superior to purchase made with a debit card.

Here's what you need to know:

The Consumer Credit Act was passed into law in 1974 and was amended in 2006.
It is a complex piece of legislation that significantly reformed the laws surrounding consumer rights in commercial credit agreements.
The legislation covers a whole range of areas including, but not limited to: the licensing of credit; loan advertisements and repayments; entry into credit and hire agreements; current account overdrafts; security; and termination of agreements.
It regulates the information that suppliers are required to give the consumer before they make a credit purchase.
It stipulates the right to cancel the agreement during a cooling off period.
Section 75 allows you, the consumer, to direct your claim not only to the supplier in the event of a faulty or non-existent product or service, but to your credit card company as well.
Section 75 offers you a significant amount of legal protection when making credit purchases.

One example of where section 75 could be particularly useful to you is if the supplier didn't respond to your queries after you made a purchase. Maybe you bought a product from a scam website. The scammers have taken your money and disappeared. Under section 75 you can claim against the credit card company as well, so you would most likely still get your money back.

How does section 75 of the Consumer Credit Act protect me?

Section 75 of the Consumer Credit Act states that both the creditor (the credit card company) and the supplier (the retailer selling you stuff) are jointly liable to the debtor (you, the customer) if there is an issue with an item you bought using your credit card (or it simply never arrived in the post).

When you use your credit card to make purchases, you are borrowing money from the bank before you pay it off. This means the banks are more likely to get involved and help you out because it is their money that has been lost. They are equally responsible to you, the consumer, to resolve the financial issue at hand. The Consumer Credit Act places joint obligation on the credit card company as well as the supplier to protect you from purchasing mishaps on credit.

What does this really mean for you, the consumer? If you make a purchase from £100 to £30,000 on credit and it turns out you've lost money through no fault of your own, the Consumer Credit Act will protect you from having to pay. If you read section 75 in full you will see that under subsection (2) the creditor (the credit card company) is entitled to compensation from the supplier. So you as the consumer won't have to pay up for a breach of contract, or if you bought a product or service from a company that later goes bust, or the product simply never arrived or is in bad condition.

If you make a purchase from £100 to £30,000 on credit and it turns out you've lost money through no fault of your own, the Consumer Credit Act will protect you from having to pay.

Is there a time limit on Section 75 claims?

There is no time limit to make a claim, but the Statute of Limitations is six years (five in Scotland) - the deadline for pursuing a claim in the courts.

However:

The retailer has 45 days to dispute a reversed transaction
They also have a further 60 days to gather evidence
There is no time limit for card providers to consider your claim, although you can take your case to the Financial Ombudsman Service (FOS) after 30 days
Claims might be rejected if there's no direct relationship between the borrower and the shop (for example if you've used your credit card via Paypal to pay for your purchase)

Can I get a refund on a credit card transaction for a payment abroad?

Yes you can. Section 75 claims also applies to payments made in foreign countries and purchases of products from abroad. You can use the link below to download a letter template to make your claim.

And it is not just credit card purchases that are protected. You can claim under Section 75 for:

store cards.
payday loans.
hire loans.
'Buy now pay later' agreements.
Any purchase made where the deposit was paid using a credit card (so you could pay for a new car using cash or debit card and you would be protected as long as the initial deposit was paid using a credit card).

Interesting fact: if you use a credit card to pay a deposit for something, even just a few pence, you are protected for the total amount of the product (as long as it is more than £100 and less than £30,000).

How do I make a claim under section 75?

Download a template letter for Section 75 claims

It's fairly simply:

Your first step is to contact your credit card company who are jointly liable with the supplier.
They send you a claim form to fill out where you outline the problem.
If they don't send you a form you can write them a letter.
For a claim to be successful you must be able to prove that there was a breach in contract or misrepresentation on behalf of the supplier.
You don't have to take the retailer to court first either
You can claim on goods purchased with your Credit Card in the UK AND abroad

DID YOU KNOW? Since 2014 approximately 18,600 people have lost money due to holiday rental fraud.

Am I covered under Section 75 for purchase made with a Debit card too?

Sadly not. However, for debit cards you can make a request for a charge back with your bank. It's not a legal requirement but it can have a happy ending too:

"Mrs M, from West Sussex, purchased insulated cardboard boxes from a company online, in good faith, in April 2018, for a charity event she was helping with. She paid using her debit card by bank transfer (she wouldn't have normally dont that, but the sales agent who helped her by email to get the right size boxes and spec offered her that option (!) and because she was in a hurry abotu her deliery, she didn't think further and agreed to it). After a couple of weeks she realised she hadn't received any delivery confirmation. the website did not display any contact phone number. She tried to get in touch with them with no joy. It was becoming clear to her that she had been scammed of her money and would never see the goods. Mrs M got in touch with the Citizen Advice Bureau who directed her to the Fraud Agency, who made a note of the issue but directed her to her bank for help.So Mrs contacted Santander. The customer service team there explained that they couldn't legally get the money back under Section 75 as she didn't use a credit card to pay for her order and didn't even actually pay through the website. But also said they would flag this with their own fraud team for investigation.They did kick off a Charge Back process with the seller's bank, which eventually got her £212 our of the original £234 she'd spend back into her account."

What will I need to make a claim?

You will need the following:

a claim form (or a letter template if no claim form is given to you by your bank).
original receipts and proof of purchase.
evidence that your product is faulty, damaged, or never arrived.

Prevention is better than cure of course. but how can you sure you are not scammed or given a faulty product in the first place? This is sometimes hard; a Which investigation found that the amount of money lost to parties purporting to offer cheap holiday rentals has risen by 25% in 2017-2018. This can often ruin a family holiday and lead to unnecessary stress, worry and wasted time trying to sort out the problem.

When does section 75 NOT protect me?

It is also important to understand where section 75 does not protect you.

Hire purchase agreements are not covered under Section 75

The most common instances are:

non-commercial agreements.
cash purchases (only if the deposit was also made in cash).
any purchase under £100 or over £30,000.
any circumstance in which the link between creditor-debtor-supplier is broken (see third party section below)
misunderstanding on purchase.
Hire Purchase Agreements on a car.
additional cardholders.
breaches of contract over £30,000 or under £100.
debit card purchases (Section 75 is NOT chargeback protection given to debit card holders at the bank's discretion. Some people confuse these two protections because they cover the same circumstances of faulty or non-existent products.)

Claiming for a card purchase refund. Know this: Chargeback (on a Debit Card) is NOT a legal requirement; Section 75 (applies to Credit Card purchases) is a legal requirement that protects you.

If you're buying something worth MORE THAN £30,000, make sure to triple check that everything is legitimate so that you won't find yourself out of pocket.

Similarly, if you are buying products UNDER £100 you will not be covered, even if the items combined are worth more than £100.

For example, if you buy two single one-way train tickets each costing £51 and the train operator goes into administration, you would not be protected by section 75 because neither train ticket was valued at £100 or more. Yet ironically, if you had bought a return ticket at £102 you would be covered under section 75.

Are you covered if a Third Party like Amazon or eBay is involved in the purchase?

Section 75 MAY NOT apply if there is a third party involved in the transaction process, a significant loophole discovered by MoneySavingExpert.

The Consumer Credit Act identifies that in each financial transaction with a creditor there are three actors involved: the consumer, the creditor and the supplier. They form a direct link with each other so that in the event of a mishap, the creditor and supplier are jointly liable to the consumer.

However, when a third party gets involved - such as Paypal, Amazon, eBay or any kind of agent - that link breaks down and section 75 does not apply. But the rules surrounding this loophole are confusing. Even the Financial Ombudsman Service cannot provide a full break down of third parties that would deem section 75 redundant.

Additionally, a lot of third parties offer protection to their customers irrespective of the Consumer Credit Act:

Paypal Buyer Protection
The travel industry's Package Travel and Linked Travel Arrangement Regulations 2018 which makes the travel agent or organiser liable if a holiday isn't as it was advertised.
Even Amazon, a third party, offers its customers the Amazon A to Z Guarantee which guarantees the condition of the item and its quick arrival.

Can you claim under section 75 if you've made a purchase with someone else's credit card?

Sadly you will not be covered if you make a purchase using a credit card which is registered to an account in another person's name, maybe your husband's.

In the UK all credit cards have one account holder. So section 75 will not apply in cases where a husband and wife both have credit cards carrying their own names but are registered to one account (in the husband's name or vice versa). If the wife purchased a product on her husband's account from a company that went bust overnight, she would not be protected by section 75 because the creditor-debtor-supplier link has been broken.

If you are unsure about whether you are legally protected under the Consumer Credit Act when buying through a third party, your best bet is to purchase the product directly with the supplier or contact the third party themselves to see what consumer protection they provide. Alternatively, the Financial Ombudsman Service have a page dedicated to common misunderstandings about claims relating to article 75 of the Consumer Credit Act.

We hope these tips will help you if you need to a refund claim on your credit card in the future. Let us know i you have any question or other points related to this topic that you'd like us to answer. You can leave a comment below, email us or send us tweet.

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Claimscore Guide: claiming a refund on credit card purchases using Section 75