Protection when buying - Use a Credit Card
Buying Goods or Services Using a Credit Card
Every time we buy something we are making a legal contract. When we buy goods or services and it goes wrong, is faulty, delayed and isn’t quite what we thought it would be, it can be extremely disappointing. If you buy goods or services on your credit card, something called Section 75 of the Consumer Credit Act can give you extra protection if things go wrong.
The law can seem complicated. What are your rights?
The law states:
Everything you buy must be:
Of satisfactory quality
Fit for purpose and
As described
If services the business must do anything that was agreed before the work started and as part of your agreement (your contract)
Every service you buy must be carried out
With reasonable care and skill
Charged at a reasonable price (if the price isn’t agreed)
Within a reasonable time
What if this doesn’t happen…
If the business is in breach of contract. You have a legal right to seek a solution. Under Section 75 of the Consumer Credit Act 1974, the credit card company is jointly liable for any breach of contract or misrepresentation by business.
This means the credit card provider is just as responsible as the business for the goods or services supplied, allowing you to also put your claim to the credit card company.
You can make a claim to both the business and credit card provider at the same time, you can’t get a refund from both though, only one.
This is useful if the business has gone bust or doesn't respond to your letters, emails 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.
Amounts spent on a credit card
The goods 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 more than £100 or 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 full cost of the goods or service you're buying that is important - not the amount paid on the card.
For example, if you ordered a dining room table and chairs and paid a £75 deposit with your credit , you later paid the balance of £600 by bank transfer, you would be covered for the whole £675 if the business didn't deliver your dining room table and chairs.
Section 75 gives you the same rights against the card company as you have against the business.
So if your claim against the business is for a refund, replacement, repair of faulty goods or the cost of fixing or putting right a service. This would be the claim you could bring under Section 75 against the card provider.
However, if you bought two items that together cost more than £100, but each cost less than £100, Section 75 would not apply and the card company wouldn't usually be liable.
Remember that you can make a claim even if an account is closed and that Section 75 can apply to credit card transactions made abroad.
What if I paid by debit card? What is chargeback?
If the item or service you've bought was under £100, you may still be covered by chargeback.
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).
If you use a debit card, it's possible that you may be able to use chargeback instead to get some or all of your money back if something has gone wrong with something you have bought.
Chargeback is the term used by card providers for reclaiming a card payment from the businesses bank. If you can provide evidence of a breach of contract (the goods were not delivered, for example) you can ask your card provider to attempt to recover the payment. Check with your card provider as to how the rules apply to your card.
What should I do?
Speak to the business, ask them for what you want. If this does not work, then you would need to email or write to them.
Rules for life
Be polite
Be clear in what you want
Keep a record of all letters and communications
If the credit card provider disputes what you are saying, direct them to this website, business need to know their rights as well.
For further advice contact Citizens Advice Consumer Service 0808 223 1133.
Have a listen to our podcast around how to get your money back…