Consumer rights expert Martyn James explains everything you need to know about Section 75 protection and how you don’t have to make the entire purchase with a credit card to get your money back. silver
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The past few years have been carnage for consumers, as we battled for refunds, battled business failures, and failed to convince other businesses to respond to our complaints.
However, if you’re crafty and have a bit of discipline, there’s a way to pay that helps you avoid all that trouble and gives you an extra level of projection when things go wrong.
If you pay for goods or services with a credit card, the Consumer Credit Act may help you if something goes wrong.
It sounds a bit legalistic, but Section 75 claims help you get your money back from the card provider.
What’s more, these claims cover a wide range of issues, for example, if your online purchases don’t show up, or if the company building your conservatory goes bankrupt – or even if you’ve been tricked into taking a dodgy timeshare.
Here’s how it works.
Section 75 Explained
There are many ways to pay for your purchases when shopping. But it doesn’t matter whether you’re online or on the street, you have certain rights if you pay by credit card that you don’t if you pay by other methods.
Paying for goods or services with a credit card (or some other types of credit agreement) gives you legal protection.
This means you can ask the card provider to refund you if the goods or services you paid for don’t show up or are “misrepresented” (in other words, what you sold is not what you you were told that would be the case).
However, not everything is simple. Claims made under Section 75 must meet certain criteria and are reviewed on a case-by-case basis by the card provider.
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How do I know if I have Section 75 rights?
If you pay for goods or services with a credit card that cost between £100 and £30,000, the credit card provider is jointly liable with the provider of the goods or services for any breach of contract or misrepresentation. statement.
This may involve goods not showing up, items being damaged or not doing what they are supposed to or situations where you have been misled by the supplier.
You also don’t need to complain directly to the provider – although I strongly recommend that you do.
You’re even covered if you’ve only paid a deposit for something on your credit card – and in theory that deposit amount can be less than £100 (even just £1, in theory) as long as the total cost of the goods is between £100 and £30,000.
In such cases, you are still covered for the full value of the item in question.
So if you pay a deposit of £100 for a sofa that costs £2000 on your credit card and you’ve paid the rest in cash, if the business goes into liquidation, the card provider should in theory give you pay the full £2,000.
The rules and the quirks
There are a number of other conditions that must apply before making a claim:
- The card provider must be based in the UK, although you may complain about purchases made from companies overseas.
- You are only covered if you buy directly from the supplier, not from a third party. This is called the debtor-creditor-provider relationship and it is extremely complicated. If in doubt, file a claim anyway.
- Debit card payments, checks and wire transfers are not covered by the Consumer Credit Act, although you can “charge back” in the event of a dispute with a debit card payment.
- Although Section 75 of the Consumer Credit Act is excellent consumer rights legislation, it is open to interpretation. So while it makes sense to pay for items with a credit card, just in case something goes wrong, it doesn’t guarantee you’ll get your money back.
Other means of payment and the rights they give you
None of the following payment methods are covered by Section 75.
- Cash: Cash payment is on the decline but still one of the most popular ways to pay for goods, but if something goes wrong there is no audit trail to investigate. You will therefore need to keep your receipts. If you make a large purchase, photograph your receipt and email it so you can keep it, just in case. It also helps if you need to make an insurance claim for damaged or stolen items.
- Cheque: Many people think that checks are dying out, but millions are still issued each year. Checks work using the “clearing system” – which is over a century old. Although the rules have finally been updated and you can usually get the money the next business day, the new process is a little more confusing – and checks can still be returned.
- Store card: Store cards are good for getting 10% off merchandise when you first take out the card, but pay for them immediately and cut them off. Interest rates are often exorbitant and complicate the management of our finances.
- Debit card: Section 75 does not apply to debit cards, but card providers offer a similar system called “chargeback”. Chargeback means you can ask your bank to refund your money if you dispute a transaction (if you didn’t make or authorize it). Chargeback is not a legal right and deadlines vary when it comes to how long you have to make a request – so don’t delay. Although it’s not set up to handle disputes between you and a merchant, it’s worth asking your bank for help. And there is no upper or lower limit. Confusingly, some credit card companies may attempt to “recharge” your money in the first place, but you can still file a Section 75 claim if that doesn’t work.
- Bank transfer: You should never transfer money unless it is to someone you know or trust. As soon as you click send, the money is gone. So if you got the wrong number, or worse, got scammed by a fraudster, you could lose it all. Beware.
- E-money: In recent years, websites like PayPal allow you to transfer money electronically. They have their own buyer/seller systems which help with mediation in the event of a dispute over a sale and, failing that, financial mediator as well. They are, however, considered third parties under the current reading of the law, so using a credit card to pay via PayPal could mean you are not covered by Section 75.
A few other quirks
Nothing in life is ever simple, is it? ! The Consumer Credit Act is fabulous, but there are a few quirks to keep in mind.
You have to buy directly from the supplier of the goods or services – but that’s where the law hasn’t followed the way we live today.
For example, if you’re using PayPal, it’s theoretically a third party, so you can’t make a section 75 claim (although that’s
disputed in some circles).
Another example is using an online vacation marketplace to purchase a flight and vacation.
Since they don’t provide flight and hotel, chances are you can’t make a claim either.
It’s a bit pointless. As with everything, some things we buy don’t live up to expectations.
So how about being sold a timeshare that’s not as advertised (or built) – or you’ve paid for a kitchen that’s been poorly fitted?
The good news is that you can make a claim, but investigations can be complex. If in doubt, file a complaint!
One last thing…
If you buy by credit card, pay the balance immediately or as soon as the transaction appears on your invoice.
Credit card interest is high and it’s easy to get in trouble. I lock my cards in a drawer so as not to be tempted to splash.
Discipline is tough, so stay strong!
Martyn James is a leading consumer rights campaigner, television and radio host and columnist.