How To Protect Your Purchases With Section 75

There’s nothing worse than buying something – a product or a service – and when it arrives it’s broken, faulty, or never turns up at all. Or it’s fine, but doesn’t do what the advertising told you it would. In most cases, if you’re not happy with your purchase and you return it to where you bought it from, the retailer will happily give you a refund and send you on your merry way. But what happens if the company refuses, or the reason you haven’t received what you paid for is because the company no longer exists? That’s where Section 75, a nifty piece of consumer credit law, comes in.

What does the Section 75 law say?

Section 75 is a section of the Consumer Credit Act (1974). It lays down the law – literally – on the liability of the creditor to the debtor in the event of a breach of contract by the supplier. This doesn’t mean much if you’re not a lawyer, though. In a nutshell, it translates to protection for you if:

• You buy something that costs between £100 and £30,000
• You pay for it using a credit card or another type of pre-agreed credit, like a point of sale loan or a store card
• The company providing the credit is not also the company you’re buying from
• You never receive what you paid for, it arrives broken or faulty, or doesn’t do what it was advertised to
• You’re using your credit card within its T&Cs (by not having an overdue balance, not being over your limit, and so on)

The law says that in these situations, your credit card company (the creditor) is just as responsible for making sure you (the debtor) get a refund as the company you bought from in the first place (the supplier). If you make a claim for a refund under Section 75, then your credit card company can then claim back the money they give to you from the company you bought from. This means that if you get a refund from your credit card company under Section 75, you can’t then ask for a refund from the company you bought from, too. Cheeky! ;)

How does this work in practise?

You’re covered under Section 75 for anything you pay for that costs between £100 and £30,000, as long as you’ve paid for at least some of it on your credit card. This means that things you pay for where you’ve paid a deposit or for a portion of the cost using your credit card and then settled the balance using a different payment method could be still covered.

It makes no difference whether you paid in person, over the phone, or online. It also doesn’t matter if you made the purchase here in the UK, or while abroad. But, it is important that each item you bought cost £100 or more – not the total transaction. Let’s look at a few examples of situations where you would and wouldn’t be covered by Section 75.

Section 75 and the set of pans

Let’s say you bought four pans of different sizes, that all claimed to be ovenproof. They cost £30 each, making the total transaction £120, which you put on your credit card. When you got them home and used them, they turned out not to be ovenproof at all. Because you bought each pan as an individual item, even though you bought them all at the same time, you’re not covered under Section 75.

Meanwhile, your friend bought the same pans, but got them as a set that cost £120 rather than paying for each pan individually. This changes everything. The “ovenproof” pans still aren’t ovenproof, of course, but because they were bought as a set – one box means one item – your friend is able to claim under Section 75 if the retailer are unwilling to give them a refund on their shoddy cookware.

Section 75 and the concert that was cancelled

Events can be rescheduled or cancelled for a lot of reasons. Some of them in the organisers’ control, some of them not. After all, there’s no predicting the British weather! But, what do you do if you have tickets to a concert or event that ends up not happening?

Let’s say you bought four tickets for you, your partner and your two children to go to a family festival. The adult tickets cost £50 each, and the children’s tickets cost £30 each, making the total £160. A couple of weeks before the event, you get an email from the organisers saying that due to unforeseen circumstances, the festival is cancelled. There’s no mention of a refund, so you try to get in touch with them, but without success. In this situation, you’re not covered under Section 75. Even though you bought the tickets at the same time, they’re individual tickets that each cost less than £100, which means no cover.

Your friend, on the other hand, also bought tickets for the same festival for them, their partner and two children. But they bought one family ticket, also £160, which covered entry to the event for all four of them. Because that family ticket is a single item and cost more than £100, they’re able to claim back the cost using Section 75 when the organisers disappear off the face of the earth.

Section 75 and the sofa you never sat on

Section 75 can also be useful if you have a problem with an item that you buy by paying a deposit, and then squaring up the rest of the cost later.

Let’s say you’re buying a new sofa. It costs £700, and you pay £70 as a deposit on your credit card, then pay the rest later using your debit card. But, when your sofa arrives, it’s in a different fabric to the one you chose and ordered, and is also only a two-seater instead of three. You go back to the company you bought it from to tell them that’s what arrived is not what you ordered, but they’re not prepared to offer you a refund, or replace your sofa with the one you actually ordered. You might think that because you didn’t pay £100 on your credit card, that you’re not covered under Section 75. But, you are.

This is because Section 75 covers you based on the cost of the item, even if you didn’t pay for all of it on your credit card. Because the sofa overall cost more than £100, then even though you didn’t pay for it all on your credit card and in fact didn’t even pay for £100 worth of it on your credit card, you can still claim for the full £700 from your credit card provider.

Section 75 and the flight that never flew

Unfortunately, this reason to claim on Section 75 is a reality for far too many people these days. A couple of well-known airlines have recently entered into administration, leaving travellers out of pocket and with no trip to show for it. You also hear plenty of horror stories about people booking a hotel based on pictures on their website, but arriving to find something quite different.

Section 75 can be used to get your flights and potentially your whole holiday refunded if your airline or tour operator cancels your trip. Whether you’re covered or not depends on how the holiday was sold to you, and whether you’ve paid for it as a package, or as separate items in a transaction.

You can claim under Section 75 for cancelled flights, holidays and hotels if you paid using a credit card and:

• You bought single flights, and the cost each way was more than £100 per person
• You bought your flights as a return trip costing more than £100 per person
• You booked and paid for a package holiday that included your return flights and hotel in one cost
• Your hotel is charged per room and the overall cost of your stay is more than £100
• Your hotel is charged per person, and the cost of your stay per person is more than £100

You can’t claim through Section 75 if you booked your flights as single flights, and even though the cost of the return trip was more than £100, each leg of the journey wasn’t. So, if you booked flights to Spain that cost £80 to get there and £80 to get back, the total cost is £160, but you’re not covered under Section 75.

If you’re not able to claim a refund for your flights or holiday through Section 75, then you do have other options. You’re usually covered by ATOL (Air Travel Organisers Licensing) when you book flights or a holiday these days, and this covers all sorts of things, from cancelled flights to airlines going bust. It even covers you if the problem leaves you stranded abroad. If your flights or holiday are ATOL protected, then you will have received an ATOL certificate with your booking confirmation documents. The certificate contains instructions on what to do if you need to make a claim.

And of course, there’s no substitute for good old fashioned travel insurance. An essential before you take any trip, a good travel insurance policy should protect you if your holiday is cancelled, you’re unable to go due to a medical emergency, your luggage is lost, or need healthcare while you’re abroad. Check your policy documents for information on exactly what’s covered, how much money you can get back, and how to make a claim.

How to make a claim under Section 75

The Section 75 law has a few conditions written into it to make sure that card providers don’t get flooded with claims. Claiming under Section 75 should be your last resort to get your money back, so the conditions are designed to make sure that you try the retailer to get a refund before you go to your card provider to make a Section 75 claim. You can make a claim under Section 75 if:

• The retailer can’t be traced
• You’ve contacted the retailer and they haven’t responded
• The company has gone into administration or closed down
• If you’ve gone through the motions with the company but they’re unwilling to offer you a refund.

Exactly what process you need to follow to make a Section 75 claim depends on your card provider. But, if you give them a call and tell them what you want to do, then they will be able to tell you more about their system for handling claims, and send you any forms you need to fill in.

What if your claim is unsuccessful?

If your claim under Section 75 is unsuccessful or more than 8 weeks have elapsed since you raised it, then you are able to escalate it to the Financial Ombudsman Service (FOS). FOS will conduct an independent and objective review of your claim and decide whether or not your card provider should have to uphold it, or if your claim has been denied, this was correct. The decisions that FOS make are legally binding, and so if the ombudsman agree that you should have been refunded, then your card provider must send you your money back. This also means that if FOS decide that your card provider were correct not to refund you and you still disagree, you can’t appeal the decision with another ombudsman or in court.

It can take a long time – 90 days or more – for a claim that you escalate to FOS to be investigated and resolved, and of course there’s no guarantee that they’ll find in your favour. But, if you think you’re entitled to a refund of a lot of money, it’s undoubtedly worth the wait.

What to watch out for with Section 75

Even though the protection offered by Section 75 is fantastic, there are a couple of things to watch out for or keep your eye on:

• The time limit – there isn’t technically a time limit on how long card providers have to process a Section 75 claim, which means that in theory, they could drag on. In reality, most credit card providers will handle claims like complaints and according to the timescales they lay out for those in their company complaints policy
• How long you have to claim – again, there’s no time limit, but the Statute of Limitations is six years (five in Scotland), so your claim might not be considered if you make it more than six years after your purchase
• Retailer disputes – credit card companies will make an unbiased decision on Section 75 claims, meaning they’ll take both your side of the story and the retailer’s into account before deciding whether to refund you or not. When you claim under Section 75, your card provider must tell the retailer about it. Retailers then have 45 days to dispute a Section 75 claim, and another 60 days after that to gather and submit evidence as to why you shouldn’t be refunded. So they can make it a pre
• Third-party payment processors – to be protected by Section 75 when you spend on your credit card, technically there has to be a direct link between you as the person doing the shopping, your credit card provider, and the company you’re buying from. If that company uses a third party like PayPal, Sage or iZettle to process their payments, then some card providers consider the direct link broken and any Section 75 claim you have is void. It’s a bit of a grey area, as it depends on how the law is interpreted on a case by case basis, but it’s definitely something to watch out for as you shop.