How Section 75 protects your credit card purchases

Key takeaways

• Section 75 of consumer credit law states that your credit card provider shares equal liability with the retailer if issues arise over a purchase

• You’re protected under Section 75 if use your credit card to pay for something costing over £100 and less than £30,000

• There is no fixed time for Section 75 claims to be resolved, but you can complain if it takes too long

• A feature called Chargeback also allows your card provider to reverse a transaction, but is not legally binding like Section 75

What protection do I have on my credit card purchases? 

If you buy something with your credit card and the item is faulty, broken, or never arrives, you have the right to claim the costs back through your credit card provider.

Under Section 75 of the Consumer Credit Act, you’re covered by credit card purchase protection if you use your card to buy goods or services such as a computer, phone, a car, flights, or a holiday, just as long as the item costs over £100 and under £30,000.

Section 75 means that by law the credit card companies, such as Visa, Mastercard or American Express, have equal responsibility (or liability) with the seller if there’s a problem with the things you’ve bought (in which instance the retailer is deemed to be in breach of contract).

The same applies if the company you’ve bought them from goes bust.

Debit cards don’t offer this protection, although they do offer lesser protection for purchases under £100 through chargeback. This is why it can be a good idea to pay for large purchases such as furniture and holidays, with your credit card.

However, it’s still important to remember that if you use a credit card to make a purchase, you’re borrowing money. Unless you pay off the balance in full each month you will be charged interest on the debt so you’ll end up paying back more.

What does Section 75 cover? 

Credit card protection can help in the following scenarios:

• If an item you’ve bought arrives faulty or damaged and you can’t get a refund or replacement through the retailer

• Your item arrives and doesn’t match the product description. This is deemed to be 'misrepresentation' on the seller's part.

• Your item isn’t delivered but you’ve still been charged

• The retailer or trader goes out of business before you receive your item – this includes airlines and holiday companies

• You pay a deposit using your credit card on a single item, for example, a TV or holiday. Even if you complete the full payment with your debit card, you still receive purchase protection on the full item, not just the deposit.

Examples of Section 75 claims

Section 75 claims can apply in a range of everyday situations. For example:

• You buy a £1,200 sofa on your credit card and the retailer goes out of business before delivery

• You pay a £300 deposit on a holiday using your credit card, but the holiday company collapses before departure

• You purchase a £900 laptop online and it arrives faulty, but the seller refuses to repair, replace or refund it

In each case, you may be able to claim directly from your credit card provider if the retailer is unable or unwilling to resolve the issue.

What does Section 75 not cover? 

It’s important to know the limitations of Section 75 and your eligibility. Here’s what isn’t covered:

• When a purchase is less than £100 or over £30,000. Consider chargeback if a purchase is under £100.

• If you used a third-party provider to pay instead of buying directly. Third-party payment providers like PayPal will usually offer their own payment protection scheme, and third-party holiday providers should come with specific holiday protection.

• If your purchase wasn’t a single item, for example, two single train tickets cost £60 each, so £120 in total. This is because the single item is under £100.

• If you take out cash from an ATM with your credit card and then use this for the purchase.

• If you’re not the main card holder. Purchases made by secondary cardholders are not covered. Neither are goods or services bought on your card but put in someone else’s name – for example, booking a night away as a gift.

• Purchases that fall outside of Section 75. Although rare, there are some specific examples where you’re not covered by credit card purchase protection, such as buying a plot of land.

For online purchases, Section 75 usually applies as long as you paid the retailer directly with your credit card. However, if an online checkout uses an intermediary payment service , such as a digital wallet or third-party processor, this can break the link between you and the retailer, meaning Section 75 may not apply.

In these cases, you may need to rely on the payment provider’s own protection scheme or use chargeback instead.

How do I make a Section 75 claim on my credit card? 

If you want money back on a purchase you’re not happy with – here are the steps to take:

1.  Contact the seller and ask for a refund. If they are happy to comply they will refund the amount directly to your credit card

2.  If you’re unsuccessful, follow the complaints procedure on their website. Usually, there will be a link to a complaints form

3. If you’re unhappy with the response or the retailer doesn’t respond or offer a refund, contact your credit card company to make the claim:

• State that you’re claiming under Section 75 of the Consumer Credit Act

• Include copies of receipts as proof of purchase and any emails or letters you’ve sent to the company you purchased from 

• Ask for the full amount you paid or the cost of repairing the item if it's faulty 

4. You can also ask for money to cover the cost for any damage caused by a faulty item or a service. For example, if you purchased a faulty washing machine and it leaked and ruined the floor, you could claim for both the appliance and floor repairs

How long will it take to receive the money after a claim?

There’s no fixed amount of time within which your credit card provider must resolve a Section 75 claim, but if you’re dissatisfied with how long the process is taking, you can complain. The supplier then has eight weeks to deal with your complaint.

If you haven’t heard anything after eight weeks, you can refer your claim to the Financial Ombudsman Service. The Ombudsman service is free and impartial and deals with complaints about regulated financial companies.

How long do I have to make a Section 75 claim?

While there is no time limit for a Section 75 claim, it’s best to act promptly as soon as you realise there is a problem.

This is because your lender might decide that it’s simpler to issue you a refund using chargeback, which often has a 120-day limit.

Can I claim money back on flights or a holiday?

There are some cases where you might not be covered by credit card protection:

If you booked a holiday or flights costing between £100 and £30,000 and paid either the deposit or the full price on your credit card, you may be able to claim if the airline or holiday company goes bust or the holiday isn’t as described.

But not all situations are covered. You might not be able to claim if you bought from a third-party provider and you also wouldn’t be refunded for any unnecessary costs.

For example, if you had to extend your stay longer than you expected due to airline or tour operator failure. You may be covered under your travel insurance in this circumstance.

Am I protected for purchases under £100?  

Section 75 won’t protect your purchases under £100, but you could use chargeback. 

Chargeback enables your card provider to reverse a transaction on your credit or debit card. They can then attempt to withdraw the funds that were deposited into the retailer’s account and return them to your account. But the retailer may challenge this if they believe your claim is invalid. 

Unlike Section 75, chargeback is not backed by law, but it forms part of a set of rules of conduct which most of the main banks, building societies and card providers adhere to. 

In practice, whether you use chargeback or Section 75 often depends on how you paid and what went wrong. Section 75 offers stronger legal protection, but it only applies to credit card purchases within a specific price range and where there’s a direct relationship between you, the retailer and the card provider.

Chargeback can be useful when Section 75 doesn’t apply, for example,for lower-value purchases or when a debit card was used, but it relies on card scheme rules rather than law, and claims can be rejected more easily.

What’s the difference between Section 75 and Chargeback?

How else can I protect myself with a credit card?

To reduce the risk of fraud when using a credit card, it’s a good idea to:

• Enable transaction alerts so you’re notified of spending in real time

• Regularly review your statements and report anything unfamiliar immediately

• Avoid saving card details on unfamiliar websites

• Use secure networks when making online payments and avoid public Wi-Fi where possible

Acting quickly if something looks wrong can help limit losses and improve your chances of recovering money.

Fraudsters are always trying to trick us into handing over our money. Popular scams used by criminals include:

• Stolen cards: With most credit cards having contactless technology, a thief could spend up to £100 per transaction without needing your PIN. If you lose your credit card or it is stolen, call your card issuer immediately so the card can be blocked and no more transactions will happen 

• Phishing: This is when fraudsters contact you by email, phone or post, pretending to be your bank or building society, and ask you to reveal security information, such as your PIN. Your bank will never do this, and neither will the police or any other legitimate organisation, so never give out your PIN to anyone

• Skimming: Scammers may use an electronic device to ‘skim’ card details from victims, this could happen when you use your card in shops, restaurants and bars. Your bank will be in touch if they spot any unusual, or potentially fraudulent, transactions and will cancel your card after verifying it with you 

• ID Fraud: Criminals may also use your personal details, such as your name, address, date of birth, and PINs so that they can set up new credit card accounts or take out loans in your name. Take care when disposing of correspondence and documentation and don’t put bank statements or similar items in the rubbish without shredding or destroying them first 

Kara Gammell
Personal Finance & Insurance Expert

Our expert says

"Using a credit card to buy a holiday or another big purchase such as a TV or sofa, gives you peace of mind because of Section 75 of the Consumer Credit Act.

"It’s an easy way to boost your consumer protection and means you shouldn’t lose your money if the sofa turns up faulty or your holiday company goes bust.

"Just make sure you clear your balance in full each month to avoid any interest payments.

"Yet if you are using a credit card, make sure you pay it off as soon as possible, and before interest is applied, otherwise you’ll end up spending more than you would if you had used a debit card or cash instead."

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