/ Money, Shopping

Is Section 75 fit for purpose?

Section 75

Section 75 of the Consumer Credit Act is designed to protect you but as the legislation gets older more and more people are finding it hard to claim. Share your Section 75 claim stories here.

‘Section 75’ isn’t the cuddliest-sounding phrase, but it can be your best friend when something goes wrong with a purchase you’ve made on a credit card.

Part of the Consumer Credit Act 1974, Section 75 empowers you to be able to claim your money back from your card provider if something you bought doesn’t arrive, is faulty, or the retailer goes bust.

Imagine ordering a washing machine only to never be able to use it. If the machine breaks down or didn’t even turn up, Section 75 means even if, for whatever reason, the retailer can’t help, you could claim a refund from your credit card company.

Follow the advice on how to claim in our Section 75 guide and ensure you’re not out of pocket when the worst happens.

The small print

But wait, there’s a catch. Despite this, not every payment made on a credit card qualifies for Section 75 protection (although you can have paid any amount of that cost on the card to qualify for the protection). For example, the goods or service you’ve bought have to cost between £100 and £30,000 for the insurance to apply.

It’s also crucial that there’s a direct contractual link between the consumer, card provider and retailer or service provider. If there isn’t, you won’t be able to claim.

This can prove a major stumbling block if you’ve bought through an intermediary such as a travel agent, secondary ticketing site or third-party payment provider.

That’s why Which? is investigating problems readers face when trying to claim via Section 75.

Payment provider problems

The Consumer Credit Act is now over 40 years old, and today payments are processed in very different ways than they were when the law first entered the statute books. For example, it’s well-documented that Section 75 claims can run into problems when payments have been processed via PayPal (although payments made via PayPal may still qualify for its own buyer protection scheme).

We’ve also heard reports of claims being rejected because of the way the payment was processed behind the scenes – for example, where a retailer uses a processor, like Sum Up or iZettle to collect the payment. It appears that in some cases the way a payment is processed breaks the crucial direct link between the cardholder, card company and retailer supplying the goods or services.

Because the payment mechanism often runs in the background, the consumer may have no idea that the payment processor is involved, and may simply believe they’ve paid the retailer directly.

They only find out about it when they make a Section 75 claim, which the credit card company rejects. The problem appears to affect some payments made online as well as via card readers.

Your reclaim stories

Which? is investigating the problem to get clarity for consumers so they don’t end up out of pocket. We want to know what problems you’ve come up against when making Section 75 claims, including:

  • Purchases made through third party/agent involvement
  • Purchases made by additional cardholders
  • Incorrect, misleading or unclear advice about your claiming rights
  • Any other obstacle your claim faced

Please share your Section 75 claim stories in the comments below.

Comments
Member

Thanks for this information, Faye. I have not had to make a claim against a credit card company because I deal with the retailer. I have often been pushed to contact the manufacturer, in which case I politely explain that my legal rights lie with the retailer. Where retailers have been difficult I approach the manufacturer and explain that the retailer selling their products has refused to accept that I might have a valid claim. Manufacturers have no legal responsibility unless there is a safety issue, but they can be helpful.

Section 75 only covers purchases over £100 where at least part of the cost has been paid by credit card, I believe. For smaller amounts and payments made by debit card, using chargeback is an option: http://www.which.co.uk/consumer-rights/advice/how-do-i-use-chargeback Thankfully I have not had to use this either, but was Which? Conversation that first made me aware of it.

Member
Hartlepool1945 says:
20 May 2017

Never had a problem claiming, but must add that when SpeedFerries went bust I had no trouble at all claiming back my Frequent Traveller subscription.

Member
Stanley Jackson says:
20 May 2017

I purchased a wine cooler from an online retailer, it failed and was replaced ,the replacement also failed. I asked the retailer for a refund but he declined until they had the opportunity to make a repair. I agreed and allowed an engineer to effect a repair, after 3 visits which all ended in failure, I attempted to contact the retailer for my refund only to find out that they had gone into administration.
Because I had paid for the item with a Credit Card I then pursued the card issuer under Section 75, unfortunately the will not accept my claim unless I forward them an engineer`s report which will cost circa £150 . The cooler cost some £240 leaving me with a total outlay of some £390 and no guarantee that they will accept the claim!

Member
Allan says:
20 May 2017

If the wine cooler failed within six months of purchase, there is a presumption that it was faulty when bought. The retailer (or in the case of S 75, the bank) can prove otherwise but the burden of proof is on them, not the purchaser. It is only if the goods failed after six months that the burden of proof switches to the purchaser.

Member
kenneth raine says:
20 May 2017

Section 75 ? Who does the Admin the companies or the consumer?

Member
Mike mahon says:
20 May 2017

Ordered a computer that did not arrive despite many excuses. Claimed via my Nationwide Visa credit card and money refunded very quickly. No problems at all. Mike

Member
Peter Golding says:
20 May 2017

I bought my wife a used Louis Vuitton handbag costing £600. It was not noticeable in the shop, but we quickly discovered it smelled (I think of smoke that had been disguised by deodorant of some sort). The seller refused to do anything about it and told me to get it professionally cleaned (at a cost of £90!). I put a claim in through HSBC whose card I’d used. I was told I’d have to wait weeks for a resolution but after about 6 weeks they refused saying it wasn’t covered by the scheme and the seller wouldn’t allow a refund!! So much for section 75. What made it worse was that I worked for HSBC/Midland for 26 years. The retailer laughed at me and told me to take them to court. The bank couldn’t care less and I got the impression it was a challenge for them to find a way not to pay. Perhaps I could have used Which? legal team!

Member
Faye Lipson says:
31 May 2017

Hi Peter, many thanks for sharing this experience. I’m really sorry to hear your claim was rejected. Do you remember what reason HSBC gave for saying the purchase wasn’t covered by Section 75?

Member

I am wondering whether the card issuer considered that there was no protection for the purchase of a used item as in such circumstances the buyer must exercise due diligence in examining the goods and consider whether the price was reasonable. However, in this case – or handbag to be precise – not only did the seller fail to indicate that there was any soiling of the handbag but it is suggested that an attempt had been made to conceal it or prevent it being noticed by spraying the inside with deodorant or a fragrance. That, if true, would be misrepresentation and a breach of the Consumer Rights Act for which action could be taken against the seller by the buyer but which should be avoidable by invoking S.75 of the Consumer Credit Act against the card issuer. The merchant client has possibly also broken the terms and conditions of their credit card handling agreement but that would be for Visa or Mastercard or other credit card service company to sort out.

So, as Faye Lipson asks above, it would be most interesting to know on what grounds HSBC have refused to make a refund. Notwithstanding the ‘used’ status of the luxury article for which due allowance does need to be made, it is arguable that the goods were also not of merchantable quality and possibly not fit for purpose if the inside is polluted or tainted in some way – that is not what one would reasonably expect to be the condition of a Louis Vuitton handbag even if sold as ‘used’ and would not be [and seemingly had not been] factored into the reduced price.

I would hope, Peter, that you are in a position to pursue this case against HSBC and I would suggest that you contact Citizen’s Advice and also try to make direct contact with your local trading standards service. I think if they took it up on your behalf there is every prospect that HSBC would settle with you before action. I can’t see how the bank could lose by conceding because they would merely recover the loss from the seller through the withholding of payments on their credit card sales.