I’ve always believed in keeping things easy to understand so everyone, no matter what their background, can get the help and advice they need. This is usually possible even with complicated things like regulations and the law.
But there’s one bit of law where I have to use the legal definition – because the financial benefits are too important to miss. It’s a great piece of legislation known as section 75 of the Consumer Credit Act.
Back in 1974, as the nation got used to credit cards, ATMs and other new innovations, the Consumer Credit Act was introduced as a way to regulate the new credit and borrowing deals that were springing up. But the bit that really matters is section 75, which gives you lots of rights if you buy goods or services on your credit card (and some other forms of credit).
The law has been updated several times over the years and I won’t bore you with all the details. You can find an in-depth overview of how section 75 works and your rights in our catchily titled, ‘Resolver’s huge guide to section 75 of the Consumer Credit Act‘.
Section 75 does pose a bit of a dilemma though. Many of us have, rightly, been warned off using credit at some point in our lives. Credit card interest can be hard to understand and if you buy things you can’t afford it can have grave consequences. However, as long as you’re sensible it is the savvy thing to do, to buy goods or services on a credit card if you’re spending between £100 and £30,000.
So, the golden rule is, if you buy on a credit card, make sure you have a plan to be able to pay it off straight away and that way you won’t pay any extra but will benefit from the extra protection!
Alex’s 3-minute guide to section 75
If you pay for goods or services on a credit card that cost between £100 and £30,000 and there’s any breach of contract or misrepresentation, you can potentially claim the money back from your credit card provider.
This can involve goods not turning up, items that are damaged or don’t do what they are supposed to do, situations where a firm goes bust – and crucially at the moment, getting refunds from businesses.
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 to both parties.
You’re even covered if you’ve only paid for a deposit for something on your credit card – and in theory, that deposit amount can be under £100 as long as the total cost of the goods is between £100 and £30,000.
The rules and the quirks
There are a number of other conditions that must apply before you make a claim:
- The card provider must be based in the UK, though you can complain about purchases made to businesses overseas.
- 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.
- Buying direct isn’t always obvious. Ticket agencies and online retailers that don’t provide things they sell like holidays are usually not covered. And electronic payments like PayPal also don’t count.
- 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.
Section 75 and the lockdown
Since the pandemic, Resolver has been receiving thousands of complaints every day about businesses not providing refunds. This is particularly frustrating when the law clearly states you have a right to a refund for cancelled services, like flights or packaged holidays.
As I’ve said since the beginning of lockdown, if you can take vouchers or move bookings forward then it really can help these key sectors stay in business. But if you really need the money or you aren’t able to use the services you bought in the future, then section 75 could help you.
Here’s a tip. Sometimes if you suggest to the business that you might make a section 75 claim, they may be more willing to refund you directly. This saves time and effort for the business so it’s often a pragmatic decision. It goes without saying, be polite!
One last thing…
Section 75 is a really useful piece of legislation and I hope it continues to be used not only as a way to help you get back your money but to give all of us some confidence in the system when we purchase goods or services. But like all consumer rights, it’s important not to take it for granted. So claim responsibly!
If you need help with a section 75 claim, Resolver can help.