What can I do if my claim on a credit card purchase has been rejected?

Have you ever had to claim for a faulty product or service under section 75 of the Consumer Credit Act? This act provides financial protection to consumers when they use their credit card to make purchases between £100 and £30,000. In a perfect scenario you send off a claim form to your bank and they refund you the money after you have claimed. However, if you find that your claim has been rejected, and you still think you are entitled to compensation, we have put together an outline of your legal rights and the steps you can take in such a situation.

In this article:

• Why can a section 75 claim be rejected?
• Is there anything I can do if my section 75 claim is rejected?
• Who can help me lodge a complaint?
• How long do you have to submit a claim under section 75?
• Steps to follow.

Why can a Section 75 claim be rejected?

There are a few common mistakes people make when claiming under section 75. Remember that:

• the value of the item or service you bought using your credit card has to be between £100 and £30,000.
• you have to use a credit card which is registered to an account in your own name. If a wife bought a gift for herself using her credit card which was linked to an account in her husband's name she would not be covered. If she could prove that the gift was intended for her husband then yes, she would be covered under section 75.
• there has to be genuine misrepresentation involved with the product (you cannot just be disappointed with the product or not like it).
• you are only protected if you have used a credit card as opposed to a debit card to make the purchase.
• in the majority of cases there has to be a direct link between the consumer and the supplier. So if you purchased a product through third party payment services such as PayPal or Amazon you may not be protected. 

If you fall into any of these traps you are not protected by section 75 of the Consumer Credit Act and the supplier and/or bank will refuse to pay out.

Is there anything I can do if my section 75 claim is rejected?

REMEMBER: you have a 14 day cooling off period to cancel the credit agreement under the Consumer Credit Act

• contact the supplier and your bank requesting a refund. They have 14 days to credit your account.
• Issue a final response letter outlining all the steps you have taken to resolve the problem.
• If the company and bank do not respond to your final response letter you can lodge a complaint with the Financial Ombudsman Service.

If the supplier has refused to credit your account after the 14 day cooling off period and you think that you are being denied your legal rights under the Credit Consumer Act you can lodge a complaint with your bank. If this is unsuccessful and the bank still refuses to pay out, you can ask for a final response. take it up with the Financial Ombudsman Service who have eight weeks to respond to your complaint. The Financial Ombudsman Service was established by parliament as an independant body to resolve financial disputes between UK based companies. It is free to do this.

Remember, you cannot make your initial section 75 claim to the Financial Ombudsman Service. This should be directed to your supplier and your bank who have eight weeks to process the claim. People mistakenly believe that you cannot claim with your bank until your supplier has failed you. This is not true. You can claim under section 75 to the supplier and your bank at the same time.

It is only after these eight weeks have lapsed and either the supplier or bank haven't responded or you are dissatisfied with their response that you should direct a complaint to the Financial Ombudsman Service. Some banks are rejecting section 75 claims based on the Credit Card chargeback rules which stipulate a timescale of 45 to 180 days to make a claim, when in fact there is no such time limit to make a claim under section 75. Some unscrupulous banks may try to deceive you simply because they don't want to pay out. Hold your ground and remember that you are still entitled to make a section 75 claim for up to six years after the transaction took place.

If you are confident that you are rightly entitled to compensation then the Financial Ombudsman Service will help you out. But make sure you do not fall into any of the common traps listed above.

Who can help me lodge a complaint?

• Financial Ombudsman Service. You can ring them up, send them a letter or complete their online complaint form. 
• Online articles like this one and personal experiences from other people which can help you better understand if your claim to your bank is being wrongfully denied.
• Friends and family can help you articulate and summarise your complaint to put forward to the FOS if you need some extra help.

Have you had to claim on your insurance recently? If the answer if yes, you could leave a review on ClaimScore to help others choose their insurance more wisely.

How long do you have to submit a claim under section 75?

You have up to six years to make a section 75 claim under UK statue of limitations which stipulates the period of time in which legal proceedings can be initiated after an event takes place. The FOS then have eight weeks to respond to your complaint. It's a lengthy process but well worth it if you are genuinely due compensation for a faulty product or service, or the company from which you made a purchase has gone bust. See our article on the Consumer Credit Act for a more detailed explanation of what is covered under section 75.

Steps to follow 

Make a claim with your bank and service provider first and wait for their response. In most circumstances the supplier should offer a refund or the bank will pay out. 

You can download our section 75 claim letter templates below. You'll find a template for contacting the supplier, a template for contacting the bank and more detailed instructions on how to lodge a complaint with the Financial Ombudsman Service.

Download our section 75 claim letter template

If this does not happen you can lodge a complaint with the FOS.