Section 75 and chargeback explained

Paying by credit card could give you vital purchase protection

Credit cards can be really divisive. But love them or hate them, they give spenders the ultimate payment protection which is enshrined in UK law, known as Section 75. 

Alongside the similar (though not as powerful) chargeback process, you could get your money back if something goes wrong with a purchase.

Here’s what you need to know about refunds via Section 75 and chargeback.

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What is Section 75?

Section 75 refers to a certain part of the Consumer Credit Act (stay with me here) that means you can claim a refund from your credit card provider if something goes wrong with your purchase, if it costs over £100 and less than £30,000.

This is because, as per the law, it’s considered as responsible for any breach of contract or misrepresentation as the retailer. 

This is really useful if you’re struggling to get a refund from the retailer, maybe they’re not responding to you or they’re outright refusing? If so, go to your credit card provider.

What does Section 75 cover?

Scenario-wise, Section 75 will protect you if you order goods and they don’t arrive, if they’re faulty or aren’t as described. This includes purchases made from overseas companies, which can sometimes be difficult to contact when there’s a problem. You’ll also be covered if the seller goes bust.

It may also cover associated costs or relative losses. For example, if an airline goes bust while you’re abroad, Section 75 may cover the cost of a flight back home. Or if an event is cancelled and you’ve already booked a hotel and train tickets – you should be able to claim back the costs for these.

Beware of third party payments

Section 75 only works when you make a direct credit card payment to a retailer or for a service. So if you pay for something via a middleman, like Paypal or even Groupon, you might not be covered.

You’ll also be breaking that direct chain if you add your credit card to a digital wallet like Curve, so you won’t be covered by Section 75 either. It’s the same story if you buy something using Buy Now, Pay Later and use your credit card to cover the instalments. 

However, if you use Apple Pay or Android Pay, you’ll still get the protection as you’ll still be paying the supplier directly. 

Buying something through a third party seller, like a travel agent or using Amazon Marketplace, is also unlikely to be covered. However, you may be able to use chargeback if things go wrong (more on this below). 

You only need to spend £1

While the goods or services you’re paying for need to cost over £100 and less than £30,000, you don’t need to put the entire sum on your credit card – you only need to pay for part of it. 

This can be really useful if you don’t have the credit limit to pay for something expensive or you’ve got the money in cash and would rather pay for it outright. 

The spending threshold applies to single items

Whatever you’re buying must cost over £100 or under £30,000 individually. 

So that’ll be the pair of trainers, the flight or the train tickets – each will have to meet the minimum limit. So if you bought two flights, they would both need to cost over £100 each.

Secondary cardholders don’t get the protection

If you’ve added another person to your credit card account, they may not be covered by Section 75.

Editor in Chief, Andy has run into this with his wife, Becky, who he added as a supplementary cardholder to his Amex credit card account to boost their cashback. Anything she buys isn’t protected by Section 75 unless there’s proof he’s affected. So if she bought something for him on her Amex card it would be covered, but if she bought something for herself it wouldn’t. 

You’re not protected if you buy something for someone else

This is the case if you pay for goods or services on your credit card, but the contract with the retailer is in someone else’s name. So if you bought something for your daughter on ASOS via her account, you’d not be covered by Section 75.

Gift cards break the chain

You’re not covered by Section 75 if you buy something with a gift card and something goes wrong, even if you bought the gift card with a credit card.

However, if the company goes bust and as a result you’ve got a git card you can no longer use you should be able to make a Section 75 claim if it’s worth more than £100.

Can section 75 be reversed?

Technically yes, although it’s rare. A retailer could initially accept the Section 75 claim but later discover evidence that contradicts it and request to reverse the claim. However, in the unlikely case of this happening, you’d be informed of this and you’d be able to submit your own evidence and challenge the decision.

What is chargeback?

If you pay by debit card, or buy something that’s less than £100 on a credit card, you won’t be covered under Section 75. Instead you can use chargeback if you’re not getting anywhere with the retailer.

Chargeback allows you to reverse a transaction if you didn’t receive the goods or service you paid for, the goods were faulty, counterfeit or poor quality, or you were charged the wrong amount.

There’s no payment limit, so you can make a chargeback claim on purchases of any amount however (apart from with Mastercard there’s a minimum spend of £10)  there is a time limit. You must make a claim within 120 days of making the purchase. 

Unlike Section 75, chargeback isn’t a legal requirement, so it doesn’t always work. Instead it’s part of a set of rules that participating banks agree to. 

You’ll only get the money back which you paid on your debit card – so you can’t make a part payment and get the whole sum refunded.

PayPal is still a bit of a grey area with chargeback as it’s a third party and breaks the payment chain. 

However, if you withdraw all the money from your PayPal account and use it to make a payment with your debit card, you’re essentially paying the retailer directly and you’ll be able to see the exact amount taken from your account. This may improve your chances of success with chargeback if something goes wrong.

What if my claim is rejected?

Whether you failed to get money back via Section 75 or chargeback, your first step is making an official complaint to the card provider. If it rejects your complaint or if you’re still unhappy with the outcome, take your final letter to the free Financial Ombudsman Service, which handles disputes between customers and financial firms.