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How Section 75 could protect you and your family

Lockdowns, travel bans, 14 day-quarantines – the coronavirus outbreak has made it almost impossible to know if you can fulfil your summer holiday plans this year. And while we ride things out, staying hopeful that maybe – just maybe – we will get to take that sunny trip abroad, it’s important to have all the facts in front of you before making a decision on what to do.

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Whether or not you’ve paid in full, or in-part, for any summer activities, you’ll want to know your rights as a consumer if you’ve made any purchases using your credit card. 

To help you, we’ve decided to outline some tips below. With all the information to hand, we want you to feel comfortable in making the right decision for your summer plans. 

So, let’s take a look at a part of the Consumer Credit Act 1974 – Section 75 – and what it means for you as a credit card holder:

What is Section 75? 

If you’ve already made a holiday purchase using your credit card, you will automatically have rights that protect you in the event of not receiving the goods or services you paid for.

Under Section 75, credit card providers share a legal responsibility with the trader or retailer for getting your items or services to you as intended. In practice, your credit card provider should support any claim you need to make for your money back, if you find there’s a problem with your purchases – such as a seller going into liquidation, for example.

What does Section 75 cover?

Most transactions you make – online or in-store – for goods or services purchased between the value of £100 and £30,000 will be covered under Section 75. And, even if you used your credit card for a part of the cost, so long as the value of the part-covered cost is more than £100, you’ll be covered for the entire sum. 

Let’s take Saul, for example. He’s already booked a week-long trip to Barcelona in July. After putting down a £150 deposit with the hotel, using his credit card, he’s since paid the remaining £350 with his debit card. Having paid over £100 with his credit card, if the hotel does go bust before his trip then Saul will be entitled to get the full £500 value returned under Section 75.

What specifically will it protect you against?

  • Most transactions made to a UK or foreign business will be covered, including any items that are delivered to your UK address.
  • Any purchases where the item/s are damaged, faulty or not in the condition advertised on arrival.
  • Any associated costs relating to your transaction, within reason.
  • Law also applies to store cards or store instalment credit cards.

What doesn’t it cover you for?

  • If any of your flights, hotels or overseas holiday plans are cancelled then refer to the terms of the contract. You’ll probably find there’s a refund or rebooking policy which you’ll need to review before thinking about a Section 75 claim. Remember – Section 75 will only cover you for cancellations. If you’ve already rebooked then you won’t be eligible to claim.
  • If a retailer or trader used a third-party payment processing firm to collect payment, you’re unlikely to be protected. The claim you need to make is against the trader who took your money directly, so if the hotel you booked goes bust and your stay was arranged by a travel agency, the agent will be responsible for managing any refund or re-booking.
  • Any faulty items under any manufacturer warranty. If there is a warranty, you may need to take it up with the manufacturer.
  • Any hire purchases, where you won’t own the item.
  • Any cash withdrawals made using your credit card.
  • Any transactions using a debit card – Section 75 only covers credit cards. 

How can you make a claim?

  • Check your retailer’s refund, cancellation or rebookingpolicy. In most cases there will be a refund policy.
  • If you’re refused a refund, get in touch with your credit card company to discuss your consumer rights under Section 75. They will probably ask you to fill out a claim form.
  • Failing that, the Financial Ombudsman Service is at hand to support such claims, should a dispute arise between you and the bank. In most cases your credit card company will support you, but it’s worth considering the protection available via an impartial dispute resolution service. To get in touch with the FOS, you’ll need to request a letter of deadlock from the bank, or wait at least eight weeks since the time you last heard from them. 

Remember, Section 75 is your legal protection as a consumer. If you have used your credit card for any larger purchases, you can rest easy knowing your money will be protected under this clause.

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