A customer is entitled to get a refund on a credit card purchase of between £100 and £30,000 under S75 Consumer Protection Act 1974 when a problem arises. The credit card refund isn't an act of benevolence, it is a legal requirement. The protection doesn't extend to debit or store cards.
Section 75 Consumer Credit Act 1974
"Section 75 (1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor."
Credit Card Purchase Cover
The Consumer Credit Act 1974 stops a consumer creating debt on a purchase that was never received or not as it should have been. Examples of this include: where the retailer goes bankrupt prior to delivery, the item is never delivered because it was lost or damaged in transit or the goods were faulty.
Payments don't have to be full, they can be partial payments. For example, imagine that a new TV was purchased for £500. A deposit of £475 was paid in cash and the remaining £25 was settled by credit card. S75 of the Consumer Credit Act 1974 would mean that coverage was provided for the full amount.
Credit Card Purchase Cover Exceptions
- Credit card cheques and cash withdrawals;
- The purchase must have been made by the primary card holder. Purchases made by a family member who is a secondary card holder aren't covered by S75;
- Goods and services purchased through an agent, intermediary or online processor. This includes: PayPal, Worldpay and travel agents.
Getting a Credit Card Refund Under the Consumer Credit Act 1974
If the company dealt with has gone into liquidation, contact the credit card company and explain what has happened and that a section 75 claim is to be made. It is possible that they will advise the customer to contact the supplier, but there is no obligation to do this.
If the company is still solvent, it is the customer's prerogative regarding whether to approach the supplier or not. It is generally easier to deal with the supplier the goods were purchased from unless the supplier happens to operate from overseas.
Complaints and the Financial Ombudsman
The credit card company should now send the customer a form that needs to be fully completed and signed. If the provider is not willing to provide this, it is possible to register a complaint to the Financial Ombudsman.
Paying by credit card does afford a customer vastly more protection than debit card purchases, but it is important to settle monthly balances in full to prevent credit card debt. If credit card debt is a problem, there are a number of debt solutions to help deal with this matter.
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