If you’ve had problems with something you bought – maybe it never turned up or it was delivered broken – you might be wondering what your rights are.
Both Section 75 of the Consumer Credit Act 1974 and chargeback can offer protection on purchases you make, but whether you’ve paid with your credit or debit card will determine which protection you benefit from.
In both cases, you could be entitled to a full refund in the event that the goods you bought were faulty, they were never delivered due to the retailer going out of business or if the company didn’t provide the advertised service. However, while in many ways these levels of protection are similar, there are some fundamental differences, and it’s likely that you’ll find one more suitable than the other.
How Section 75 works
With Section 75, you should be able to get a refund on faulty items or purchases that didn’t show up at all – providing you paid for them with a credit card and they cost between £100 and £30,000. Here, both the retailer and your credit card provider are held jointly liable.
Even if you only made part of the purchase on your credit card, you should be entitled to a refund if the total value of the purchase is more than £100 and less than £30,000. For example, if you put a deposit on a piece of furniture using your credit card, you should be able to claim a refund if the furniture doesn’t arrive or is broken when it does.
However, there are exceptions and conditions apply, for example, you can’t get a refund if you bought several items that cost less than £100 individually, even they total more than £100. On the other hand, you might be eligible if the items were bought as part of a deal – for example, two vases for £100.
To make a claim, you have the option of getting in touch with both your credit card provider and the retailer.
How chargeback works
While in many ways chargeback is similar to Section 75, you can also claim a refund using chargeback if you used a debit card – not just if you used a credit card. The list of cards you can claim with include: Visa Debit, Visa Electron, Maestro and MasterCard Debit cards, MasterCard and Visa prepaid cards and MasterCard and American Express credit cards.
One of the positives of chargeback is that you may be able to claim a refund regardless of how much the purchase cost you.
To claim, you usually have to get in touch with your card provider within 120 days of making the purchase. This extends to 540 days if you paid for services to be provided at some point in the future – such as a flight or hotel reservation. When you get in touch with your card provider, ask them to dispute the transaction. The process may be sped up if you get in touch with the seller as well.
From here, you should begin the process of reclaiming the cash – which is often taken from the seller’s bank.
Which is better?
To put it simply, Section 75 is usually the more comprehensive cover when making purchases. However, that’s not to say chargeback is useless.
As chargeback allows you to apply for a refund of purchases worth less than £100, it may be an appropriate route to take if you didn’t spend over that amount. Plus, if you paid using a prepaid card or debit card, you won’t be able to benefit from Section 75.
On the other hand, Section 75 is often regarded to be much stronger than chargeback as the credit card provider is held jointly liable with the retailer – while banks are also legally responsible to play their part. Plus, you won’t be able to take anyone to court if the bank refuses to pay out with chargeback.
So, if you’re planning on making a purchase over £100, it’s worth putting it on a credit card to make sure you benefit from the added protection offered by Section 75.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.