Section 75 is your financial superhero on a secret basis - purchase something worth above 100 and up to 30000 on your card, and your credit card company is obligated by law to save the day in the event of a hitch. Therefore, in case something you have paid has arrive in bad condition or disappeared, or even failed to arrive altogether, you can claim your money back under a Section 75 refunds in the UK. And free software to simplify it.
What is Section 75?
Section 75 refunds in the UK consumer protection legislation enacted in the 1970s that implies that your credit provider will have to bear the same responsibility as the retailer in case things go wrong with a purchase. But it does not apply to everything that is bought: only that which costs a given sum:
Section 75 implies that in case you put down money on a purchase of something priced above 100 pounds and under 30000 pounds on credit, the equally liable lender (alongside the retailer) will suffer loss in case of something going wrong.
This is not the credit provider who feels good. It is a legal insurance that is implemented to ensure that you are never in the situation of having to repay debt over something you have not received, or have not received as it should be. It may be a flight, a kitchen, a computer, or anything else, pay using a credit card, a store card or using store instalment credit and the credit provider is liable as well.
Best trick to follow - use a credit card to pay the deposit and cover the entire cost of a product or a service.
The legislation is clear about this you obtain the protection of the entire cost of an object or service even when you pay by credit only a portion of the amount. All that is required is that the total price you are purchasing needs to be above 100 pounds and not more than 30,000 pounds. As much as it does, you will have it at the full value even when you charge 1p of it in your credit card.
You may also read :- Credit card or loan: Which is right for you in the UK
What does Section 75 cover?
The best section 75 is FANTASTIC protection... provided that what you are purchasing qualifies.
The scenarios on which section 75 is and is not applicable are addressed in the table below. However, in every case, will you keep in mind that the product or service you are purchasing must be between a minimum price of 100.01 and a maximum of 30,000. Failure to do so will mean that you do not have section 75 cover (though you can potentially recover your money through chargeback).
Section 75 vs chargeback
Section 75 is a part of two avenues available to you in case you have charged something with your card, and believe that you should have received a refund during the purchase, the other one is chargeback. Although this is normally viewed as inferior protection, in a few instances chargeback may protect you whilst Section 75 fails.
Not covered by Section 75? Try chargeback
Section 75 applies only to credit purchases of over 100 (i.e. of at least 100.01+). It does not apply to anything you pay on a credit card that is less than that or anything bought to any price on a debit card or a charge card (that is not regarded as a credit purchase).
And this is where chargeback comes in. This is not a legal safeguard, but Visa, Mastercard and Amex have their own regulations, and therefore, any customer who purchases anything using a debit, credit or charge card is covered under this. It lets the card issuer reimburse you a purchase you have made to a retailer in case it concurs that you have a good cause of action.
No action requirement as in the case of Section 75, though; it will require you to be fast when using chargeback, as there exists a time limit on claims. Regulations by Visa, Mastercard and American Express tend to provide you with 120 days to claim it- and the clock usually begins to tick the day you paid it, however, circumstances differ. See our Chargeback guide on complete details.
But in case you have already filed a Section 75 claim which has been declined, and because of the time he/she took you are out of the deadline to chargeback your account you can still complain to the Financials Ombudsman. It will also consider its success or lack of success in its estimation on whether a chargeback claim would have succeeded had you had the opportunity to do so.
Section 75 AND chargeback covered? Consider chargeback first
Although chargeback is not legal protection (whereas Section 75 is), in the event that the full value of what you have bought is covered by both, it usually makes only sense to attempt chargeback on the first attempt.
In the event that you believe your case is pretty cut and shut (such as when your holiday has been cancelled by the provider and it will not refund you, or when you purchased something online and it never came), consider this advice of MSE founder Martin Lewis:
But, when chargeback does not reimburse you in respect of the direct value of your purchase (as in, where you made a deposit on your credit card and then paid the outstanding balance in cash), or even in case you think that chargeback might be more complex than that (as in, where you are concerned that the retailer will be highly uncooperative, such as), go directly to the Section 75 refunds in the UK. By so doing, even when your credit provider cannot recover the money with the retailer, then he or she still has a legal responsibility of repaying you.
How do I make a Section 75 claim?
Section 75 claims are clearly stipulated by the law that places on the shoulders of both the retailer and credit card company.
In certain cases you may find it easier initially to complain to the retailer to get a repair or a replacement instead of a refund but you need not.
In case the retailer has collapsed, or even if it is in a different country, such as in the case of you, you can bypass the retailer and go directly to your credit card company. Ensure your claim is to the correct location- should you have a Mastercard/HSBC Mastercard you should contact HSBC and not Mastercard.
You will probably be required to provide your card carrier:
- The information on the purchase - the date, the amount, what you were attempting to purchase.
- The reason why you are making a Section 75 claim - this may be due to the fact that a product or a service has failed to maintain to the standard required by your consumer rights or that the item you purchased has not arrived at all. It may also happen that you are requested to provide evidence or external confirmation that the product you purchased is defective.
- Any action you have already undertaken to recover the money back with the seller / service provider - your card provider will in all probability query you on whether you had tried to recover the money yourself. However, it is important to keep in mind that the amount is also shared between the card provider.
Section 75 can be claimed in three major ways:
- Via online banking or via your mobile banking application.
- Through a claim with our free reclaim tool Section 75.
- Composing a letter to your credit card company with our template letter.
When it does not succeed and your claim is denied, then your next option should be to escalate your claim to the Financial Ombudsman.
Option 1: Section 75 claim via your banking application or the Internet
The way you do this will vary depending upon your card-giver. Others will allow you to contest payments by merely tapping the transaction in your mobile banking app and others will allow you to contest payments via their online chat platform or via telephone.
Ask your card provider on how to claim. This is normally available on its web site, or in the Help section of your mobile banking application. When it appears that you can claim easily via your card provider then direct but when they insist on you jumping through the hoops or filling out a claim form then your safest option is to employ our free Section 75 reclaim tool.
Option 2: Reclaim the Section 75 with help of our free reclaiming tool
On this tool, we have collaborated with complaints company Resolver. It could assist you in writing a letter (which you can edit prior to sending), sends you a letter, informs you when you received a reply, maintains your complaint and refers to the Financial Ombudsman in case needed.
Note Resolver is not a complaints management company. The service is free to use and you control complaint and making progress on it, but it will assist you in the process and can also assist in escalating your claim at the appropriate moment as well.
Option 3: Fill out our template letter
In case you are more comfortable with just mailing the letter on your own, there is also a template that you can refer to as an overall guideline. To download and edit: Click the following link:
Section 75 Claim Rejected? Complain to the Financial Ombudsman
In case your credit provider does not assist you, has taken more than eight weeks to respond to your complaint or even is not satisfied with their response, refer to the Financial Ombudsman.
It is absolutely free, and worth doing. Complaints in which you believe that you have not been treated fairly and reasonably may be investigated by the ombudsman. This encompasses cases that a firm has failed to observe good practice in the industry, the rules made by the regulators and the law of the land. Although it is not formal as a court hearing, Ombudsman can still make firms pay you compensation in case it agrees with your case.
With your guidance I had charged on a credit card (the only card I have ever charged anything to) a deposit of £300. I claimed under the Consumer Section 75 refunds in the UK due to the fact that the car had not fulfilled the standards of durability. Lloyds was not interested to know either, as it argued that it could not establish that there was a defect at the point of sale, but the Financial Ombudsman has requested that Lloyds refunds me the full amount of the cost of a replacement engine and the diagnostic - to the tune of 8k. Lloyds has not opposed the ruling.
