02 Sept 2019 Section 75 of the Consumer Credit Act makes both lenders and retailers responsible for when a service or product isn’t delivered. However, the latest survey results shockingly reveal that many people don’t know what it protects them for.
A OnePoll survey of 2,000 UK adults commissioned by credit experts TotallyMoney, showed many people don’t fully understand the cover they get through their credit card.
If the item you pay for is worth over £100, but less than £30,000, you are covered by Section 75 if you make any of that purchase with your credit card — even £1.
Your claim will only be successful if the Debtor-Creditor-Supplier (DCS) Link isn’t broken.
This means that the exchange of money between you, your credit card company, and the service provider, must be maintained.
So, when the DCS link is broken, often when using a third party such as PayPal, Section 75 wouldn’t apply.
You’re covered on a purchase made with Apple Pay, though, which nearly three quarters of people (71%) don’t realise. But, if you book a hotel through a travel agent, you won’t be covered if it the hotel folds, as over a third (41%) of people wrongly thought. You should, however, be ATOL protected in that instance.
If your airline goes bust before you fly, or your brand-new phone arrives with a cracked screen, you could make a claim to get your money back — provided everything is in order as above.
“A holiday can be the highlight of your year, or maybe you’ve spent months saving for your dream laptop. But, if it happens you can’t jet off, or the laptop doesn’t even turn on, you can be left feeling like there’s nothing you can do.
“That’s where Section 75 steps in. It gives you comfort in knowing that if you feel you haven’t received what was promised, that there’s something you can do to get your money back.
“Section 75 doesn’t mean we should be care-free about our credit card spending, though. One way to know how much you should be spending on your credit card is by getting your TotallyMoney free credit report. You’ll get regular updates on the effect your credit card spending is having on your credit score.
“On top of that, so you’re never caught out, here are 10 points anyone shopping with a credit card should know about Section 75.”
Section 75 Top Ten 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.
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