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Christmas card – extra consumer protection if you buy pricey gifts with a credit card

Luke Whitmore - Law on the Web

  1. 22 December 2015
  2. Consumers
  3. 0 comments
Woman buying gifts online with a credit card

Planning to make a big purchase this Christmas? It could be worth paying with a credit card to get the extra security offered by Section 75 of the Consumer Credit Act.

What does Section 75 say?

Essentially, Section 75 of the Consumer Credit Act says that, if you pay for a large purchase (something worth more than £100, but no more than £30,000) on a credit card, the credit card provider has just as much responsibility for the goods as the retailer you purchased them from if something goes wrong.

Depending on the situation, this might mean you are owed a refund for the item, the cost of repairing it, or a replacement – and you can get this from either the retailer or the credit card company.

Section 75 claims can be made:

  • if you buy something which turns out to be faulty
  • if something isn’t how it was described to you
  • if an item you ordered doesn’t show up
  • if you purchase a service or a product but the company goes out of business before supplying it

See our section on common problems with goods for a full explanation of exactly what rights you have in these situations.

To qualify for a Section 75 claim, you don’t need to pay for the entire item with your credit card – even having simply put down a deposit on your card is sufficient, as long as the purchase itself was more than £100.

When might Section 75 be useful?

Section 75 might not sound all that useful – after all, you’re owed a refund anyway, right? Why is it worth claiming it from a credit card company instead of the business you bought the item from, when it all ends up the same?

First of all, it can come in handy if a company goes bust. In today’s unstable economic times, there’s always a risk that a business will collapse before you can get what you’ve paid for. If that happens, you won’t be top of the list of people to get a refund from what remains of the company – it’s more likely that bigger creditors will snatch up their share of the assets and leave you with nothing. However, if you paid with a credit card, the provider will still be on the hook to make sure you get what you’re owed.

Secondly, a Section 75 claim can be extremely useful if the business you bought the item from is simply being difficult about it. If they’re refusing to honour your consumer rights, whether it’s by arguing with you or just ignoring you, instead of having to take legal action, you can simply claim the money back from your credit card provider.

Section 75 also applies to purchases made overseas, so it can be used in cases where contacting the seller is not a practical option.

Exceptions to Section 75

Section 75 is not entirely watertight, and there are sometimes issues when making a claim. The most common quibble is over the actual value of any single item in the transaction.

In order to make a Section 75 claim, you need to have spent over £100 on one thing. This means that if, for example, you buy a set of three chairs for £150, it might be argued that each chair cost you £50. If the chairs were only available as a set, this shouldn’t be an issue, but it may still be raised as an objection.

You may also run into problems if you pay a middleman for an item, as opposed to making a payment directly to the supplier. For example, if you buy from a website which is not owned by the company supplying you with the actual item, Section 75 may not apply (though arguments have been made both ways).

If you have problems making a Section 75 claim, you may be able to instead rely on the chargeback process, whereby you can get a refund on something purchased on a credit card if you can prove that you have a valid reason. However, this is merely a policy of credit card providers, as opposed to an actual legal right. Unlike Section 75, the chargeback system also applies to debit cards.

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