What Is A Section 75 Refund?
A Section 75 refund is applicable to those who may find themselves in a situation where they’ve used their credit card and paid for an item that was faulty, or used it for a service transaction, only for the company to go into administration before they’ve received their product.
Even if the product or service provider has refused a refund, under the Consumer Credit Act 1974 – you’re entitled to one from your credit card company. They consider the organisation equally as liable if you suffer a breach in contract.
Is There A Time Limit On Section 75 Refunds?
While there is no time limit for making a claim under Section 75, the statute of limitations in the UK is six years (and is five in Scotland). Meaning if you were to pursue a Section 75 refund through the courts, this is the amount of time you would have to do so.
What Protection Does A Section 75 Refund Give You?
Section 75 refunds apply to products or services that are valued between £100 and £30,000 of which part of the purchase has been made with a credit card – this includes deposits. According to the Consumer Credit Act 1974 – any purchases that aren’t confined within this remit cannot be considered for a Section 75 refund.
For example, if you make a purchase of a TV and you pay a £50 deposit on your credit card, you would be protected under the act. If you purchased, say, a microwave for £90 and paid a £30 deposit – you wouldn’t be eligible as the full item value doesn’t fall between £100 and £30,000.
These rules only apply to single transactions. So, if you were to buy two items for £90 each at the same time, they would not be eligible for a Section 75 refund – despite the total transaction price being over £100. The only exception to this would be if the product was bought as a bundle, or a 2-for-1 deal.
You will also not be covered if additional fees, such as delivery and process charges, took the cost over £100. For example, if you purchase a concert ticket for £95, but website fees and delivery of the ticket made the total cost £115, you would still not be applicable for a Section 75 refund as the original price of the item was below the £100 threshold.
Do Section 75 Refunds Include Debit Cards And Other Payments?
Unfortunately, under the Consumer Credit Act 1974, Section 75 refunds only apply to purchases made on a credit card.
On What Grounds Can I Make A Section 75 Claim?
There are two grounds on which you can apply for a Section 75 refund, and those are…
- Breach of contract – meaning you did not get what you paid for. Such as an item not being delivered, or a service provider going bust.
- Misrepresentation – meaning you were given the wrong information, which persuaded you to buy a product. E.g. paying for a mobile phone accessory – only to find out it isn’t compatible with your smartphone as described.
How Do I Make A Section 75 Claim?
You should initially try and resolve the issue with your service or product provider, they should be your first point of contact. However, if your matter is not resolved by the organisation directly, then it can be raised with your credit card provider.
You should contact your provider only when you have been refused a refund, or ignored. And in this instance, you should provide the following information:
- What was purchased
- Where it was purchased
- How much you paid
- How you brought the item or service
- A copy of the receipt(s)
- Details of how you believe your contract has been breached
- Examples of you trying to make contact with the provider
- An explanation of what you’re seeing from your credit card company
If you are rejected for a Section 75 refund, yet you believe you are still eligible – you can escalate the case by making a complaint to the Financial Ombudsman Service.
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