Do I Get Extra Rights When Buying With A Credit Card?
It's a piece of advice that you might easily hear: make sure you buy your goods with a credit card so that you get extra protection. But what exactly does that extra protection involve? Well, there are various rights that can arise when someone buys something using a credit card but one of the biggest that very often applies is the right of an individual to pursue a claim against the credit card company itself.
Section 75 of the Consumer Credit Act 1974
This right is provided for by section 75 of the Consumer Credit Act 1974. What it does is, in particular circumstances, to make the credit card company liable in the same way as a company in breach of contract in a commercial agreement. The phrase used by lawyers is "jointly and severally liable" and it means that the credit card company itself could also potentially be pursued and ultimately sued for the breach of contract.
Breach of contract
For example, if a company has supplied goods which are not of satisfactory quality (contrary to section 14 of the Supply of Goods Act 1979) or services without using reasonable care and skill (contrary to section 13 of the Supply of Goods and Services Act 1982) then you would be able to pursue them for breach of contract. What section 75 does is to put the credit card company in the same position in terms of liability as the company which has in fact committed the breach.
When a supplier goes bust will my credit card company help?
In many circumstances this would make no odds since in fact you'd simply take the good back and get it replaced or the work would be re-done to your satisfaction. But where, for example, the company which supplied the goods or services has in the meantime gone bust then in some circumstances you may well be left high and dry. But if you've paid by credit card then you could look to section 75 and turn to your credit card company.
Over £100 and up to £30,000
The right applies to most goods or services purchased with a credit card which are over £100 up to a maximum of £30,000. In certain limited circumstances section 75A also provides for protection in some cases above that limit.
When does my credit card not cover me? The exceptions
Note that there are a few exceptions. These include (though are not limited to) some cases where there is a running account type of credit such as certain store cards and also does not cover cases where payment is by debit card, cheque or cash.
Finally, it's also worth being aware of the voluntary chargeback scheme run by some card providers called Chargeback. This might help in the case of debit cards and also for credit card transactions up to £100 (though check whether the card provider has a minimum amount or not). This isn't the same as section 75 and what's more the claim generally has to be made within quite a tight timetable that also needs watching out for.
As mentioned above, none of this detracts from the consumer's ability to pursue the wrongdoer directly. But even so, section 75 provides an extremely important right when it comes to seeking redress when things go wrong.
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