Why section 75 is the best money back hack you’ve never heard of
- Credit: Resolver/Getty
Martyn James of complaints support company Resolver, on a hidden consumer right you may not know about.
With businesses going bust, holiday refunds being frustrated and scammers stalking the online world, it’s hard to know how best to protect yourself when you buy something.
All is not lost - if you’ve paid for goods or services on a credit card and something goes wrong, you’ve got more rights than you think.
It sounds a bit legalistic, but section 75 of the Consumer Credit Act can help you get your cash back.
And it covers a huge range of problems, for example, if your online shopping doesn’t turn up, or the business that’s building your conservatory goes bust or you’ve been tricked in to taking out a dodgy timeshare.
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Paying for goods or services with a credit card (or certain other types of credit agreement), gives you statutory protection if something goes wrong under the Consumer Credit Act.
This means that you can ask the card provider to give you a refund if the goods or services you’ve paid for don’t turn up or are ‘misrepresented’ (in other words, what you’ve been sold isn’t what you were told it would be).
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These claims are made under what’s known as ‘section 75’ of the Consumer Credit Act (section 75 is the section of the act that applies to purchases like this).
In theory, you can make a claim if the seller goes bust, or if you’ve only partially paid for the goods on a credit card.
It’s not all straightforward though. Claims made under section 75 have to meet certain criteria and are looked at on a case by case basis by the card provider.
- How do I know if I’ve got rights under section 75?
If you pay for goods or services on a credit card that cost between £100 and £30,000, the credit card provider is jointly responsible, along with the supplier of the goods or services, for any breach of contract or misrepresentation.
This can involve goods not turning up, items that are damaged or don’t do what they are supposed to do or situations where you’ve been misled by the supplier.
You don’t need to complain directly to the supplier either – but we strongly recommend you do.
In fact, make the same complaint using Resolver and cut and paste the same information.
You’re even covered if you’ve only paid for a deposit for something on your credit card – as long as the deposit cost between £100 and £30,000.
In cases like this you’re still covered for the whole value of the item in question.
So if you pay a £200 deposit for a sofa that costs £2,000 on your credit card and the rest in cash, if the firm goes in to liquidation the card provider would in theory have to pay you the full £2,000.
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There are a number of other conditions that must apply before you make a claim:
1. The card provider must be based in the UK, though you can complain about purchases made to businesses overseas.
2. You are only covered if you buy direct from the supplier, not a third party. This is known as the debtor-creditor-supplier relationship and it’s enormously complicated. If in doubt, put a claim in anyway.
3. Debit card payments, cheques and transfers are not covered by the Consumer Credit Act, though you may be able to make a ‘chargeback’ if there’s a dispute with a debit card payment.
4. Though section 75 of the Consumer Credit Act is a great piece of legislation when it comes to consumer rights, it is still open to interpretation. So though it makes sense to pay for items on a credit card, just in case something goes wrong, it does not guarantee that you’ll get your money back.
5, You have to buy direct from the retailer. Even using PayPal or any third party payment company breaks the chain.