The Terms and Conditions surrounding Section 75 of the Consumers Act state that when you make a purchase on your Credit Card or Store Card for an item over £100 but under £30,000.00, then the provider is also liable for anything which may go wrong. This could be the goods being faulty or an airline going out of business (if booked direct!) and it certainly could prove to be a really useful piece of information to know as it means that Credit Card Providers can give you Refunds on purchases which have gone wrong.
When Does Section 75 Protection Apply?
Section 75 applies only where you have a direct contract with the provider of the item you are purchasing, and you pay with your credit card. It DOES NOT cover payments on a debit or store card, nor does it cover payment by a credit card cheque.
The Section 75 Act also applies when you have paid a deposit on your card of less than £100 but it is for an item which costs more than £100.
Example = you purchase a new sofa:-
* Retail Price £400
* 10% Deposit paid when order placed = £40
* Payment method = Credit Card
* Upon delivery outstanding balance of £360.00 is paid by Cash, Cheque or Debit Card
In this circumstance you would still have the protection of Section 75. Always take care when paying for items on credit so as not to find yourself being charged interest, late or missed payment fees.
Be careful not to assume that any transaction you make on your credit card is protected, it does have to relate to a single item which is £100 plus, not including postage or fees. Also where you have paid for an item via an agent, such as a package holiday then again you would not be covered as this is not a direct deal. Also take care with your purchases as a return ticket which costs £101.00 (excluding fees would be protected, but 2 singles at £50.50 each would not.
There is an increasing trend nowadays for people to use paypal for making online payments. Whilst Paypal is a useful tool, anything paid for through this system, but using your credit card, is NOT covered by Section 75 as paypal is seen as the third party, rather than a contract direct with the seller.
Most of us would not take this into account when making a purchase, but we would soon be kicking ourselves if something went wrong as we had no cover which we so easily could have had if we had know about Section 75 and how it can work for us.
Making a claim under Section 75
If you want to make a claim, in the first instance, you should contact your credit card provider. This is not Visa or Mastercard, but the company that provides your card, e.g Barclays, HBOS or Vanquis. Commonly, they may tell you to go to the retailer, but you do not have to, and they have to send you a Section 75 claim form. The law clearly states that the credit card company have a joint responsibility for the faulty item, and as such, there is no "pecking order" as to who should be spoken to first. If the credit card company are being obstructivem tell them simply that you wish to make a claim under Section 75 of the Consumer Credit Act, and that you require a claim form.
If you doscover a company from whom you have ordered goods, are going into administration, you can make a claim to your credit card company under what is known as an "anticipatory breach". This means that it is fair to assume you will not be receiving your goods, and that youwill therefore be out of pocket. When you telephone for a claim form, do not be put off ny the credit card firm rtating that they will try and get the monies back from the company going out of business - this isn't your problem, and does not affect your right to claim under Section 75 rules.
If all else fails, you need to make a complaint to the Financial Services Ombudsman