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Esther Shaw

Section 75: Free protection for credit card spending


Section 75 of the Consumer Credit Act gives shoppers extra insurance when making important purchases – provided they use their credit cards to pay.

Gold credit card

If you want an extra layer of protection against things going wrong when you make a major purchase, consider paying by credit card.

Section 75 of the Consumer Credit Act 1974 applies when you buy goods or services that cost between £100 and £30,000 and pay with a credit card.

'Joint liability'

"The card provider is jointly liable with the retailer or service provider if the goods or services are faulty or not delivered," says a spokesman from financial analyst Defaqto.

"This provides an additional layer of legal protection for consumers, and is a real benefit of paying by credit card, rather than by cheque or cash, for certain transactions."

For example, if you bought tickets direct from an airline with a credit card and the airline went bust, you would be covered under Section 75.

"Each claim is assessed on a case-by-case basis," says a spokeswoman from the UK Cards Association.

'Worth making a claim'

"But if goods turn out be faulty or not fit for purpose, or if the company you bought from doesn’t deliver or goes bust, it’s worth making a claim."

Even if you’ve only used your credit card to pay a deposit on goods and services costing between £100 and £30,000, Section 75 protection still applies to the entire purchase.

And the cover also applies to purchases made overseas.

"There were lengthy court proceedings over this issue," says the Defaqto spokesman.

International cover

"But the protection now also extends to transactions abroad."

The extent of the cover is a bit more complex when it comes to holidays and flights.

If you used your credit card to buy a plane ticket from a travel agent, you’re unlikely to be able to get any money back via Section 75 if the airline delays or cancels the flight.

This is due to a quirk under which the travel agent was supplying the ticket and not the flight.

Package protection

But if you used your credit card to pay for a travel agent’s own package of travel arrangements, such as a package holiday, the travel agent would be classed as the supplier, and so they and/or the credit card provider would be responsible if there were problems.

If your bank or card provider turns down a Section 75 claim, you can make a formal complaint.

If you do not receive a satisfactory response within eight weeks, you can take your case to the Financial Ombudsman Service.

Talk to retailer first

However, you cannot claim under Section 75 if you have simply changed your mind about a purchase, or later discover you could buy it more cheaply elsewhere.

It’s worth noting that section 75 doesn’t absolve the supplier of their responsibilities. If things do go wrong, they should still be your first port of call.

But it does offer an extra layer of protection if the supplier isn’t co-operating or is no longer in business.

What if you pay by debit card?

If you use a debit card to make a payment, or are outside of the Section 75 limits, you might still be covered under a scheme called Chargeback.

Visa, Mastercard and American Express apply this internal rule when consumers make purchases with a debit card.

It also comes into play when using a credit card for purchases under £100, and when using a prepaid card.

"Chargeback might, for example, provide cover if a supplier goes bust before delivery, or if goods that are delivered turn out to be faulty," says the Defaqto spokesman.

"Crucially, however, unlike Section 75, Chargeback doesn’t provide legal protection because it’s a voluntary arrangement."

The exact rules vary according to the card scheme, but you usually have to make a claim within 120 days of your purchase.


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