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Credit Cards

What is Section 75 and how it protects you

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Section 75 of the Consumer Credit Act (1974) is good news for Credit Card holders as if offers excellent protection if things go wrong with a purchase of goods or services.

You might need the protection when you use your card to:

  • Book a holiday - But the travel agent or website goes bust
  • Buy some CDs from an online retailer - But they never turn up
  • Buy a Kettle from a shop - But it doesn't work
The important point to understand with section 75 is that both the credit card company and the company you did business with are equally liable.
The Card companies sometimes try to wriggle out of their responsibilities
True to form the Card companies will often try to wriggle out of their obligations when a customer tries to seek compensation under Section 75. For example -
  • They might argue you have to seek compensation from the retailer first - Incorrect
  • Argue that you cannot claim because your balance has already been paid off - Incorrect
  • Argue that if a trader has gone out of business you're not covered - Incorrect
  • Argue that section 75 only covers goods and not services - Incorrect
Any card company that tries to argue any of the above points is merely trying it on. They either want you to do all the investigations which they should be doing themselves, or else they are trying to save money by not having to compensate you.

Sadly many people put too much trust in finance firms but if they know the law, in this case Section 75, the card company has no case as it is obviously very much on the side of the consumer.

So if you have a problem and feel you're covered under Section 75 but your card company is offering little help then first remind them that you know the law and your rights. But if that doesn't work threaten to take the case to the Financial Ombudsman.

Summary
Consumers get excellent protection when using their credit card to buy both goods and services. This is why they're an asset to good personal finance, assuming of course they're not used to rack up large debts.

See also

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    How to Audit your Credit File

    With errors your rating will suffer
    How a clean credit rating can save you money
    4 steps to a clean up any mistakes
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