If you pay for goods or services on a credit card the Consumer Credit Act could come to your aid if things go wrong. ‘Section 75 claims’ help you get your money back from the card provider if you can’t get the retailer or business to listen to you.
Much as I love the Consumer Credit Act, it’s pretty old (1974 originally) and though it’s been updated a few times, the way it’s worded doesn’t always fit with the way we live and shop today.
For example, you may not be covered if you’re paying for something using an ‘electronic payment system’ like PayPal. Many people have a credit card as the main way of paying through these websites. But the credit card companies dispute that the law covers this. I have to say, I don’t agree, but until this is addressed in a court case, it’s likely complaints about section 75 claims and payments by this method will be turned down.
The tricky part about the law is when it comes down to whether the goods or services have been ‘misrepresented’. That’s a pretty broad term and it’s why there are lots of section 75 complaints. There is a real grey area when it comes to goods being fundamentally misrepresented or just not meeting expectations. For example, complaints about things like kitchens and conservatories crop up loads when it comes to section 75. In these cases, it’s really important to explain why you’ve been misled when making a complaint.
Buying through third parties
Most frustrating of all is the dreaded ‘debtor-creditor-supplier’ rule. Of all of the money-related things I have to explain this one is particularly tricky to summarise! Here goes…
To paraphrase the law, in order to have the protection of section 75 you have to buy direct from the supplier of goods. If you go through a third party, you’re not covered as this ‘breaks the chain’. The most common example of this is paying for concert tickets. If you buy direct from the venue or official ticket agency and spend over £100 then you’re covered. But if you buy through a third-party ticket agency, you’re not.
This wasn’t a massively widespread problem. But then around ten years ago, two things happened. More people became aware of their rights and of section 75 – and there had been a boom in cheap credit. Secondly, the way we shop has fundamentally changed. Buying online is now the principal way many of us purchase things. But it’s not always clear who is providing what when you buy online. So a claim may work with Amazon, but not with Opodo.
Taking holidays as an example, if you book with the airline direct, you’re covered for your flights if they go bust. But if you’ve gone through a comparison site, you’re not. The same goes for all the online holiday booking companies that aren’t offering their own packages.
In fact, this is also the same for other online ‘marketplaces’ that offer a list of services and goods from other retailers. In theory, buying from Amazon Marketplace might not be covered (though Amazon has its own buyer/seller dispute process). And as I mentioned, using your credit card through money transfer services like PayPal is currently considered to ‘break the chain’ too.
Our tip: Use online sites to compare deals then book direct to ensure you’re covered.
Here are another few key exceptions to section 75
Goods for ‘your benefit’. If you buy a flight on your card for yourself, you’re covered under section 75. If you buy one for your partner, then you aren’t. This is because the goods must be for ‘your benefit’. This leads to all kinds of arguments that the items bought for partners bring the buyer ‘pleasure’ so therefore they’re for the cardholder’s benefit. I’ve seen some claims of this nature that raised an eyebrow or two!
Deposits: If you buy a car for £10,000 but pay a deposit of £100 on your card, your card provider is liable for the full amount you paid in the event of a successful section 75 claim. Only the rules aren’t clear if the deposit has to be over the £100 minimum payment to qualify or not in these instances. No-one attempts to answer this scenario definitively. So one retailer might pay out in full if you’ve paid a £2 deposit, whereas others might refuse unless you’ve paid £100 or over.
Timeshares: Some services and goods are ambiguous. For example, if you buy a timeshare, you’ve technically got what you paid for. But what if it’s fundamentally not what you were sold (in a different place, not built yet, falling apart?) Loads of complaints of this nature occur each year. The problem arises because the law uses the term ‘misrepresented’ to qualify for section 75 protection – and that’s widely open to interpretation.
Featured in Mirror – Martyn James