25 Nov 2019 Credit experts TotallyMoney reveal their top 10 tips for customers to keep their purchases protected under Section 75 of the Consumer Credit Act ahead of the season’s busiest shopping period. The experts say:
- Section 75 of the Consumer Credit Act protects credit card purchases from £100 to £30,000
- Section 75 gives people extra protection on faulty goods, items that never arrive, and services never fulfilled, including when companies go out of business
- Nearly 1 in 3 people (29%) don’t realise they’re covered at all, according to a TotallyMoney survey
- Shoppers forecast to spend £7 billion across Black Friday and Cyber Monday
- 62% of adults plan to take advantage of Black Friday and Cyber Monday deals
Section 75 of the Consumer Credit Act means credit card companies and retailers are jointly and severally liable when a product or service isn’t delivered. With 62% of adults planning on making a purchase over this hectic shopping period, the extra protection afforded to credit card purchases could prove invaluable in recouping losses should retailers renege on their promises.
TotallMoney says that Section 75 claims should be honoured providing the Debtor Supplier Chain isn’t broken. This means the exchange of money between customers, the credit card company, and the service provider must be maintained. Transactions through third-party sites such as PayPal would therefore not be covered.
Customers left in the dark
The credit experts are keen to spread the word about Section 75, following a OnePoll survey of 2,000 UK adults commissioned by TotallyMoney that revealed nearly a third of adults don’t realise such protection exists.
In light of the research, TotallyMoney has put together 10 tips on what Section 75 is and what shoppers need to do to make a claim.
TotallyMoney also warns that while Section 75 does provide extra protection, shoppers still need to use their credit card responsibly — especially when shopping online.
They advise only spending what you can afford, paying off the full credit card balance using the money saved in your bank account for such spending, and only buying from reputable sites that have the padlock symbol in the web browser, to show the site is secure.
Alastair Douglas, CEO of credit experts TotallyMoney, comments:
“In the lead-up to Christmas, it’s only natural for people to spend a bit more than usual, which is why it’s so important for customers to make sure they protect themselves as much as possible during this busy shopping period.
“With more and more of us poised to snap up bargains online, the potential for fraud is greater than ever. At this time of year, there’s nothing worse than your goods not turning up or being charged for something you didn’t buy, and being left out of pocket as a result. Section 75 gives consumers an extra level of security.
“Section 75 doesn’t mean you can be care-free with your credit card spending, though. You should only buy what you can afford and use the money left in your bank account to pay off your full balance.
“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking your free report is the first step towards making sure your score doesn’t suffer at the hands of fraud. With this, customers can easily make sure everything is as it should be — helping them move towards a better financial future.”
Top 10 Section 75 tips
1. Limits on claims
Individual items and purchases costing more than £100 and up to £30,000 are covered under Section 75. So, whether it’s a pair of £100 shoes that fall apart on the first wear, or a swanky new £20k car that comes complete with faults, as long as you paid on credit card you could be reimbursed the full amount.
2. We’re talking credit, not debit
Section 75 doesn’t cover anything bought using a debit card. Chargeback protection is as good as you’ll get with debit.
3. They’re bust. You’re not broke
Buying from a company that goes bust before they deliver, doesn’t mean your money’s lost. Section 75 requires credit card companies to get your money back.
4. Pay a deposit, get full value cover
When a deposit for goods or services is required, use a credit card — even when the deposit is less than £100. Should anything prevent you from settling the balance (like the company goes bust or the seller vanishes), Section 75 lets you claim the full amount. Not just the paid deposit.
5. Pay part credit and part cheque, get full value cover
The same goes if you decide to pay part of the balance by credit card and the rest by cheque. Consumers can reclaim the full value of the qualifying goods and services even if the total balance wasn’t paid using credit card.
6. Stay protected on closed cards
Say you buy an item, close the credit card you bought it with, but something goes wrong with the qualifying goods or services, Section 75 means you can still make a claim.
7. Extra expense cover
If you book a holiday and the flight is cancelled, through Section 75 you could claim back additional accommodation and food expenses, providing those consequential losses were reasonable.
8. The Section 75 loopholes
Buying through a third party (like online marketplaces or travel agents), additional cardholder purchases, or cash that’s withdrawn from your credit card account won’t offer Section 75 protection. You need to have paid the company directly (so purchases made through PayPal, for example, aren’t covered).
9. Section 75 applies to all credit cards
When it comes to Section 75 there’s not one rule for one credit card company and something different for another. All credit cards come with Section 75 benefits.
10. The claim process
First port of call: the retailer you bought the goods or services from. Failing that, go to the credit card company — this might be your bank or building society, not Visa, Mastercard or AMEX. They’ll get you to fill out a claim form and voila! Your money is back where it belongs.