Your rights when paying by credit card CCA section 75 problems
Section 75 will apply to PayPal payments, if you are buying from a business trader.
When you can't claim against your card company
There are some transactions where the company that dealt with your card payment is not the same as the one that provided the goods or services. In these cases, section 75 may not apply.
Paypal and similar online payments
If you buy something online and use PayPal or a similar online payment service, as long as the company you are buying from has a 'Commercial Entity Agreement' with Paypal - or equivalent - you should still be able to claim under Section 75 for any 'misrepresentation' or breach of contract by the company selling the goods or services.
Paypal does offer its own buyer protection scheme, so it's worth checking if you'd be covered by that if you have a problem with your purchase that fall outside Section 75.
Credit card cheques
Section 75 doesn't apply to payments made by credit card cheque. For section 75 to apply, there has to be an existing agreement between the credit card company and the retailer accepting the credit card payment. As credit card cheques can be paid to anyone, there isn't a pre-existing agreement, so section 75 doesn't apply. If you receive any of these cheques in the post, shred them - they usually charge a higher interest rate and offer no interest-free period.
Cash withdrawals
If you use your credit card to withdraw cash for a particular purchase, you won't be covered by section 75 as there is 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 are best avoided.
Additional cardholders
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. If the purchase is made with the primary card holder's authority - if they expressly request the purchase be made or could be implied to benefit such as the purchase of a family holiday - they should still be covered under Section 75.
When section 75 may not apply
For example, a man buys some land using a credit card. He is the secondary cardholder on a credit card account in the sole name of his wife. The land is registered in his name because he bought it for himself as a development project. The land turns out to have been misrepresented by the seller. The husband's claim against the credit card company under Section 75 is unlikely to succeed as the land is not for the cardholder's benefit, in this case his wife.
When section 75 does apply
In contrast, take the example of a husband and wife buying a holiday club membership in joint names. The wife makes the purchase using her secondary cardholder card on the husband's credit card account. They say that the nature of the membership was misrepresented to them and the husband claims against the credit card provider under section 75. In this case section 75 does apply - the husband is a party to the joint purchase and will benefit from it, so section 75 applies even though they used the wife's card instead of the husband's to pay for the membership.
Agents
It's not unusual for a business taking payment to be acting as an agent for the actual supplier of an item or a service.
An example of this would be the purchase of a flight through a travel agent or insurance through an insurance broker. In these circumstances we think section 75 still applies and you should be able to claim against the credit provider.
To avoid any arguments though, where possible, make any credit payment direct to the company that will actually be supplying the goods or services.
Section 75 example - the trader won't help
You recently had a new kitchen installed but the polished granite worktops are poorly cut and badly finished. You've tried raising your concerns with the installer but had no joy. You paid by credit card.
As long as the kitchen installation contract wasn't over £30,000, the credit card company is as liable as the trader for this breach of contract – in other words a failure to exercise reasonable care and skill under the Supply of Goods and Services Act 1982 – and you are entitled to claim compensation from the card company directly.
Get several quotes from other traders for the cost of putting this work right. Then write to the credit card company explaining the problem, and claiming the cost of fixing the worktops, and provide the creditor with a reasonable amount of time to pay for the remedial work.
If the credit card company doesn't pay up, ask for a letter of deadlock so you can refer the dispute to the Financial Ombudsman Service (FOS). If more than eight weeks has passed since you submitted your claim to the card provider, you can refer your claim to the FOS straight away.
Extra shopping rights
Section 75 gives you the same claim against your card provider - for breach of contract or misrepresentation - that you have against the seller of the item or service that you bought.
In many cases you won't need to contact your credit card provider, as the retailer will fix the problem for you. If you buy something that's faulty, doesn't do what it is supposed to, or is not what you ordered, under the Sale of Goods Act you have rights to a refund, repair or replacement. You have similar rights if a service (such as work on your home) is not carried out properly.
In these cases, you'd normally contact the retailer you bought the item from, or the trader you contracted to do the work to get it fixed. And if they don't help you, you can take legal action, for example through the small claims court, to force them to sort out the problem. For more about doing this, see our dealing with faulty goods report.
