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Section 75 of the Consumer Credit Act

On UK-issued credit cards, you benefit from Section 75 of the Consumer Credit Act when you make a purchase between £100 and £30,000. Under Section 75 credit card companies are jointly responsible, along with the supplier of the goods or services, for any breach of contract or misrepresentation by the supplier. This is a useful protection if, for example, the supplier goes out of business after you have made your purchase.

Imagine that you buy a computer and when you get home and try to turn it on, you discover that it doesn’t work. Normally you would take the computer back to the shop where you bought it. But what if the retailer has gone out of business in the meantime? If you did not pay using your credit card you would have no way of getting your money back. But, if you bought the computer on your credit card, you would be able to make a claim against your credit card company for compensation or a refund for the broken computer, or the cost of repairs.

In March 2006, the Court of Appeal ruled that Section 75 applies (on UK-issued credit cards) to transactions with overseas companies, as well as to those transactions made in the UK, even if the transaction with the overseas company is made over the phone or online. This ruling took immediate effect. In 2007, a further appeal to the House of Lords sought final clarification of the law regarding the application of Section 75 to overseas transactions on UK credit cards. The ruling clarified that Section 75 applies to credit card transactions with overseas companies.

You get this protection only if you pay by some form of credit, including credit cards. Charge cards, cheques (including credit card cheques), and cash aren’t covered by this protection. As pre-paid cards and debit cards do not form a credit agreement they are not covered by the Consumer Credit Act. However, some debit card issuers do offer their cardholders protection which is similar to Section 75 protection. This is ultimately a commercial decision to be made by debit card issuers – so if you require more details please contact your card company to see if they offer this.

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