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.
Credit cards have the greatest protection, as you can claim against your card provider under Section 75 of the Consumer Credit Act in to get your money back.
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.
Your rights under Section 75
Under Section 75 of the Consumer Credit Act, the credit card company is jointly and severally liable for any breach of contract or misrepresentation by the company.
This means it shares equal responsibility with the retailer or trader for the goods or service supplied, allowing you to also put your claim to the credit card company.
You don't have to reach a 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.
This right is particularly useful if the retailer or trader has gone bust, or it doesn't respond to your letters or phone calls.
Section 75 of the Consumer Credit Act also applies to foreign transactions as well as goods bought online, by telephone or mail order for delivery to the UK from overseas.
Qualifying spend to claim under Section 75
There are some limitations to when a card company is liable along with the retailer or trader. The item or service you bought must have cost over £100 and not more than £30,000.
However, to claim under Section 75 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.
Section 75 gives you the same rights against the card company as you have against the retailer.
So if your claim is for the cost of fixing or repairing an item, this would be the claim you would bring under Section 75 - not just a claim for the refund of the money put on your card.
However, if you bought two items that together cost more than £100, but each cost less than £100, the card company wouldn't usually be liable.
If the item or service you've bought was under £100, you may still be covered by chargeback.
What if I paid by debit card?
Section 75 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 chargeback instead to get some or all of your money back - for more information read our guide to the chargeback system.
- Section 75 of the Consumer Credit Act means that you can claim against your credit card company to get your money back
- The amount that you wish to claim must be between £100 and £30,000
- Section 75 doesn't apply to debit cards, but you could use chargeback instead
Transactions where Section 75 doesn't apply
There are some transactions where Section 75 may not apply - these include some online payment services as well as purchases from cash withdrawn on a credit card.
Examples include Amazon Marketplace purchases, and in some instances where a third party is involved, such as if you buy from a travel agent, rather than directly from an airline or holiday company.
If you use your credit card to withdraw cash for a particular purchase, you won't be covered by section 75 as there's no link between the credit card company and the retailer.
It's usually best to pay the retailer using the credit card itself.
Cash withdrawals usually attract a fee and a much higher interest rate anyway, so they're best avoided on the whole.
Payments through Paypal and similar services
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.
If your partner has a credit card and has added you as an additional cardholder, it's usually best to get the main cardholder (your partner) to make any big purchases, rather than using the extra card yourself.
This doesn't mean that purchases made by a secondary card holder won't be covered, but it's best for the primary card holder to make larger purchases if you want to be sure of protection under Section 75.
If, however, the purchase is made with the primary card holder's authority and if they expressly request the purchase and will benefit from it - a family holiday, for instance - they could still be covered under Section 75.
Payments through an agent
It's not unusual for a business taking payment to be acting as an agent for the actual supplier, for example buying a flight through a travel agent or insurance through an insurance broker.
In these circumstances Section 75 should still apply and you should be able to claim against the credit card provider.
To avoid any arguments though, where possible, make any credit card payment direct to the company actually supplying the goods or services.
Taking your claim to the Financial Ombudsman Service
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 straight away without the need for a deadlock letter.