Paying by credit card can give you valuable legal protection if the company you’re buying from goes bust or doesn’t deliver what it’s promised, and you may be able to claim a refund from the credit card company. You may also get some protection when paying by debit card under a voluntary scheme. With charge cards you don’t generally have protection.
Your rights when buying by credit card
If you use your credit card to buy something, such as goods or a holiday costing over £100 and up to £30,000, you’re covered by ‘section 75’ of the Consumer Credit Act. It means the credit card company has equal responsibility (or ‘liability’) with the seller if there’s a problem with the things you’ve bought or the company you’ve bought them from fails.
Problems that are covered
- The company must have failed to supply the goods or have supplied goods that are not up to standard, or
- The company must have misrepresented what it is supplying or selling; for example, a software supplier that says a software package you’re buying will work with a particular computer when it doesn’t.
Minimum and maximum spending limits
In order to qualify for protection from your credit card company, you have to spend between £100 and £30,000 – and the £100 minimum amount applies to each item or set of items you buy, as opposed to the total bill. For example, if you bought a dress and jacket that weren’t part of a suit, with each one costing less than £100, you wouldn’t qualify for the consumer protection under section 75.
If you pay for something on your credit card and there’s a problem, your first step should be to contact the company you bought it from. However, if you don’t get a reply from them, or they won’t give you a refund, you can make a claim against your credit card company. You should:
- Write to the credit card company, stating what you bought, where and when you bought it and how much you paid, including copies of receipts.
- Tell them that you’ve tried to contact the company you bought the goods from and what the response has been – if any.
- Explain what you’d like the credit card company to do, which would be to refund the purchase price into your credit card account – be sure to state: “I am making a claim under Section 75 of the Consumer Credit Act”.
- Keep a record of the letter or email you’ve sent.
You can write your own letter, like this…
[Your address][Company address]
Reference: [Details of your complaint and card number xxx]
Dear On [date], I bought [item] from [retailer] using the above card.
The [item] has proved to be [faulty/ not as described/ not fit for purpose] because [explain problem]. I have tried unsuccessfully to resolve this dispute with the retailer and am now looking to you to pay me [set out what the sum you are seeking e.g. the cost of repairs] or [to provide a refund].
I base my claim on Section 75 of the Consumer Credit Act 1974 which makes you jointly and severally liable for any breaches committed by the retailer. I would be grateful if you could respond within 14 days Yours faithfully,
Or many credit card providers prefer you to use their own forms for disputing transactions and making a claim under section 75, such as this form from Barclaycard…