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How to use credit cards and protect your consumer rights

Esther Shaw / 04 October 2017

Tips to help you protect your consumer rights when you use a credit card.

Senior using credit card to purchase online
Ensure your consumer rights are protected when you use a credit card

If you’re booking flights, splashing out on a dream holiday, buying a new set of wheels, purchasing tickets – or making any kind of major purchase – it’s well worth paying with your credit card.

A guide to using credit cards...

Paying by plastic can offer you an extra layer of legal protection, helping you to get your money back from the retailer or supplier if anything goes wrong.

Here’s our guide to this piece of legislation – along with tips on how to get a refund from your credit card provider.

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What is Section 75?

Section 75 of the Consumer Credit Act is piece of law (made back in the 1970s) which states that if you pay for something on a credit card, the card company is jointly liable if there is a problem.

This safety net can help if goods fail to turn up, items are damaged – or don’t do what they are supposed to do – or in situations where you’ve been misled by the supplier.

For example, Section 75 offers protection if your online shopping doesn’t turn up, or if you buy products which then turn out to be faulty. It also offers protection if you pay for flights which then get cancelled, or if the business building your extension goes bust.

In each case, when things go wrong, you can rest assured that your card company will pay out. 

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How does it work?

This free protection applies to anything you buy on your credit card where the value is in excess of £100 and below £30,000.

The protection is still there even if you only part-pay on a credit card. This means that you could still get protection for the whole cost of an item of service, despite only paying for a fraction of it on credit.

Try to fix the problem with the retailer or supplier first

While you don’t need to complain directly to the retailer or supplier, it is highly recommended that you try and resolve the issue with them in the first instance (assuming the firm hasn’t gone bust).

If, however, the firm refuses to play ball, you can then turn to Section 75.

How to make a claim under Section 75

If you want to make a claim, you need to contact your credit card firm and ask to make a “claim for costs not received under Section 75 of the Consumer Credit Act.”

You should then be sent a claim form in which you then set out details of what you bought, and where and how you paid for the purchase. You should also provide receipts.

You need to explain how the purchase was faulty or unacceptable – and set out any contact you’ve had with the retailer before making the Section 75 claim.

Pitfalls to watch out for

• The law states that the £100 lower limit is for the cash value of a “single item” – so tread carefully.

• Any “extra” fees such as delivery charges and admin fees do not count. For example, a concert ticket which cost £99 would not be covered, even if you paid an additional £10 for delivery – meaning a total of £109.

• If you paid for an outbound flight costing £99 and a return flight costing £20, you would not be protected – even if you bought the two together. You would only be covered if you specifically bought a £119 return ticket.

Scenarios where you may not be covered by Section 75

• Purchases made through a third-party payment firm, such as PayPal, WorldPay or Google Wallet are unlikely to be covered, as Section 75 only applies where there is a direct link between you and the supplier. That said, these firms can have their own refund systems.

• Flights and hotels booked through a travel agent are also not covered. In travel, the cover only applies if you book directly. However, package holidays booked through a travel agent should be ATOL protected.

• Purchases made through group-buying websites, such as Groupon and LivingSocial may also not be covered under Section 75 – due to the indirect relationship between you and the retailer.

Your consumer rights when shopping with a credit card...

What if the card company refuses to pay up?

If your credit card provider won’t help – or if you feel your claim has been rejected unfairly – you can contact the Financial Ombudsman. Taking your complaint to the Ombudsman is completely free.

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It’s also worth noting that if you pay for items using a debit card – or paid for goods costing less than £100 on a credit or debit card – you may be able to get a refund through your card provider’s chargeback scheme.

With this less well-known safety net, you ask your card provider to ask the retailer or supplier for your money back because you have not received the goods or service you paid for.

While this is not a legal protection like Section 75, card companies such as Visa, Mastercard and American Express should provide it – and it can help you get your money back.

But note that timescales can vary when it comes to how long you have to make a request, so don’t delay.

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The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

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