What is an argument under Section 75?
This applies to section 75 of the Consumer Credit Act 1974, which allows the customer the right to demand compensation or damages from the issuer of the credit card, rather than from the seller who actually delivered the products or services.
This law applies to credit card purchases of between £ 100 and £ 30,000. This must be ‘per piece,’ so you don’t qualify for this protection if you spent £ 300 on 6 individual chairs that are £ 50 each. However, you will be entitled to make a claim under section 75 if the products were sold as a package of 6 for £ 300.
For example, if you pay a deposit now and then the rest later, if you use your credit card to make a part payment for a purchase, then the overall purchase amount would still need to be less than £ 30,000.
For example, if you negotiate with a construction contractor that they can build an extension for £ 50,000 and pay the first £ 5,000 by credit card, then this will sadly not be covered, even though the actual cost on the credit card was between £ 100 and £ 30,000, the overall value of the works was above the limit of £ 30,000.
If you pay your bill on time, it is still worth making credit card transactions in order to benefit from this free security.
If there has been a breach of contract or misrepresentation by the retailer, the insurance gives you the right to demand damages from the credit card provider. This can be especially useful when the supplier is no longer in operation, is based overseas, or maybe you simply can’t get hold of them-you are perfectly entitled to make a claim against the credit card company in all these cases.
There is no legal obligation to first apply your claim to the supplier, but this may be advisable, since it may often be the fastest way to get the result you want. Instead of a refund, if you want a substitute for an object, then it is likely that only the supplier will be able to help with that.
You can bring a claim against the credit card company if the supplier does not settle the complaint to your satisfaction. This is normally accomplished by filling in or writing to them in a particular form.
If your case is not sufficiently handled by the credit card company, you may also refer the matter to the Financial Ombudsman, who has the right to demand that the credit card company owes you harm and likely also reimbursement for the inconvenience caused in the first place by not coping with your claim properly. You can reach them on 0800 023 4 567 or by post at Exchange Tower, Harbour Exchange, London, E14 9SR, by contacting the Financial Ombudsman.
Contract violation and misrepresentation
You would need to show that the issuer has broken the contract with you or there has been some form of misrepresentation in order to make a case with the credit card company.
Misrepresentation is described as a ‘false statement of fact’ that caused a contract to be entered into. It is probable that this false statement was made innocently, negligently or even fraudulently.
If the supplier has innocently made a false statement of truth, then you have the right to withdraw from the deal and demand a refund for any predictable financial loss that you have suffered for any money already paid or alternately seek damages.
If the supplier fraudulently or negligently made a statement without a fair assumption that it was valid then you have the right to withdraw from the contract and demand a refund of any money already paid or alternately seek damages for any financial loss that the incorrect statement has caused you (Regardless of whether those losses were foreseeable or not).
Often no false statement of fact has been made, but what has been decided has not been carried out by the supplier and this could be a breach of contract. The 2015 Consumer Rights Act specifies that products must be:—
- Of Pleasing Consistency (Section 9)
- Fit for a specific purpose (Section 10)
- As illustrated (Section 11)
- Fit a sample given (Section 13)
And it is important to provide such services with:
- Fair treatment and capacity (Section 49)
- A price that is fair (Section 51)
- Within a reasonable period of time (Section 52)
If the supplier does not comply with these conditions, then they could have violated the agreement. If there has been a breach of contract, you have the right to seek damages for any possible injury you might have suffered as a result of that breach.
Of course, there are other cases of a breach, such as a supplier not performing work they said they would do, products not being shipped, or goods being defective.
The Supplier ceases trading
In situations where the supplier is no longer trading, this legislation is especially useful, perhaps because they have gone bankrupt or into administration. This does not matter, since you are still entitled to make the very same lawsuit against the credit card company and if there was a breach of contract or misrepresentation, they are obliged to pay out (See above for more information).
For example, if you booked a flight ticket (for more than £ 100) on a credit card and the travel company or airline stops selling, this will help. If you do not obtain the flight you booked, then a breach of contract has obviously occurred and you could instead demand a refund or damages from the credit card company.
How much am I able to claim?
The good news is that not only are you limited to a refund, you are entitled to seek damages, even though those damages are more than you paid on your credit card initially.
For example, if you pay a company £ 10,000 to fit a new kitchen and they do a bad job, you might argue that according to section 49 of the Consumer Rights Act 2015, they have not delivered the facilities with a fair amount of care and expertise and therefore thus broken the contract with you. If you then have to spend an extra £ 2,000 to get the job done to a fair standard, then if you like, you can demand the expense back from the credit card company.
How do I make an argument under Section 75?
You should start by contacting the issuer of your credit card and asking what their claim process is. This is probably going to be an online or paper type that you need to complete. Alternatively, you can make use of our free letter template.
You will need to offer your claim details, including:
- What was acquired
- When you bought it, it was
- How much did you pay?
- What’s gone wrong
- What number are you trying to demand back?