If you buy goods or services on your credit or debit card, you have extra protection if things go wrong compared with paying by cash or cheque.
You can make a claim against your card provider under Section 75 of the Consumer Credit Act.
If you'd rather speak to an adviser about your problem, call the Which? Consumer Rights Advice Line on 01992 822 829 to join today.
Extra protection with Section 75
Under Section 75 of the Consumer Credit Act, your credit card company is jointly liable if something goes wrong with a product or a service you've paid for by credit card.
You can potentially claim for any breach of contract or misrepresentation by the company from which you’ve bought your goods.
This means your credit card company shares equal responsibility with the retailer or trader for the goods or service supplied, allowing you to put your claim to the credit card company.
You don't have to reach stalemate with the retailer or trader before you can contact your credit card provider - you can make a claim to both the retailer and credit card provider simultaneously.
Section 75 is particularly useful if the retailer or trader has gone bust, or you're getting no response to your letters or phone calls.
If you’ve spent more than £100 and less than £30,000 you can claim on your credit card if something goes wrong. Under Section 75 of the Consumer Credit Act, your credit card company is jointly liable for any breach of contract or misrepresentation.
Only deposit paid on credit card
There are some limitations to when a card company is liable along with the retailer or trader.
To claim under Section 75 of the Consumer Credit Act, the item or service you bought must have cost over £100 and not more than £30,000.
You don't have to have paid the full amount on your credit card – the card company is liable even if you made only part of the payment (a deposit, say) on your card.
It's the value of the goods you're buying that is key - not the amount paid on the card.
For example, if you ordered a new car from a car dealer and paid a £500 deposit with your credit card and the balance of £10,000 by cheque, you would be covered for the whole £10,500 if the dealer went out of business and you didn't receive your car.
You have the same rights against your credit card company as you have against the retailer or trader.
So if your claim is for a repair then this is the claim you would put to your credit card provider - you wouldn't be able to also ask for a refund, for instance, if you were actually claiming for a repair or a replacement item.
Want to know which credit cards are best? Read the Which? reviews of more than 200 credit cards.
When you can use chargeback
If the item or service you've bought was under £100, you may still be covered by chargeback.
Chargeback is not enshrined in law like Section 75, but it is part of what is known as Scheme Rules, which participating banks subscribe to.
It applies to all debit cards, although exact rules may vary between the Visa, Maestro and American Express networks.
Chargeback also applies to credit cards and is particularly useful where Section 75 is not applicable – for goods costing less than £100, for instance.
Use our template letter to help you make a chargeback claim.
Paid on credit card via PayPal
There are some transactions where the company that deals with your credit card payment is not the same as the one that provides the goods or service - such as Paypal.
If you use your credit card to pay for something through PayPal and the funds go direct to the seller, then as long as the company you're buying from has a 'Commercial Entity Agreement' with Paypal you may still be able to claim under Section 75 for any misrepresentation or breach of contract.
PayPal offers its own buyer protection scheme, called PayPal Buyer Protection, so it's worth checking if you'd be covered by that if you have a problem with your purchase.
Paid by debit card
Section 75 of the Consumer Credit Act applies only to credit cards and not to debit cards or charge cards (where all charges must be settled at the end of the month).
It's possible that you may be able to use the chargeback scheme instead to get some or all of your money back.
Unlike Section 75 claims, this is a voluntary scheme operated by Visa and MasterCard that covers Maestro, Visa and Visa Electron debit cards. So unlike Section 75 it is not a legal requirement.
However, the Financial Ombudsman Service has stated that chargeback is deemed to be good banking practice.
If you want to make a claim on this scheme, you must do this within 120 days of buying the goods or services. Ask your bank for details of how to apply under the scheme.
Taking your claim to the Ombudsman
If your credit card company doesn't accept that you have a claim and refuses to pay up, ask for a letter of deadlock so that you can refer your dispute to the Financial Ombudsman Service (FOS).
If more than eight weeks have passed since you submitted your claim to your credit card provider, you can refer your claim to the FOS without the need for a deadlock letter.