Always book on a credit card and you’re covered under Section 75. I bet you’ve heard this but do you know what it means? What is Section 75 protection and why is it the best free perk you will ever need? A definite Spend Smarter need to know.
Section 75 protection is an automatic FREE benefit that you get when you pay by credit card. The Consumer Credit Act 1974 has a Section 75, hence the name, it is also shortened to S75 – This covers purchases made on Credit Cards, store cards and other finance agreements. We are focusing on the Credit Card protection.
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In this article?
- What is Section 75 protection?
- What is covered under Section 75?
- How does Section 75 work?
- How long does a Section 75 claim take?
- Is there a time limit for making a claim under Section 75?
- What if I want to make a claim but I have cancelled the credit card?
- Are consequential losses covered under Section 75?
- My credit card is linked to PayPal – am I covered?
- I don’t want a Credit card, how else can I get this protection?
What is Section 75 protection?
Section 75 is a legal protection that means the credit card issuer is jointly liable with the retailer if something goes wrong with your purchase. This could be if a supplier goes bust, or refuses a valid refund claim. Or a service that has been paid for is not completed.
We pay for everything we can on Credit Cards – to maximise Air Miles, trigger 2-4-1 vouchers, offers and cashback. The benefits can be huge like First Class flights for the price of economy or Peak Summer flights to Cyprus for £1. We always pay off in full of course – paying interest defeats the object!
Even if we weren’t into Air Miles / Free Money, we would still use a credit card for some purchases, especially for flights & holidays, to give us this protection.
Virgin Holidays cancelled our Las Vegas holiday due to the Pandemic. As Virgin cancelled the holiday, we were legally due a refund within 14 days of cancellation. However Virgin were under huge pressure and were warning Customers that the refunds could take 4 months to process. We left it till the 14 days then contacted our Credit card company, put in a claim and they refunded our card within 4 days.
If we had paid by any other way – like direct debit or debit card, we would have had to wait the 4 months.
What is covered under Section 75?
HSBC have produced this useful infographic to show what you can and can’t claim for. It’s not just holidays or big items. Section 75 really is there to protect us – the consumer.
How does Section 75 work?
If you tried to resolve the problem with the Supplier and have a valid claim then contact your credit card company and tell them you want to make a Section 75 claim, this may be by phone or online. They take all the details – you will need to provide them with evidence. Your credit card will assess the claim and refund you if it is valid.
With my Virgin Holidays claim, I did it online and uploaded the email from Virgin that said ‘your holiday is cancelled, you are due a refund’
How long does a Section 75 claim take?
Now we have found that this varies by Credit Card provider. Some refund you immediately – with the proviso that if the retailer actually refunds you then the Card Company will take their refund back. Other Credit Card Companies make you wait while they contact the supplier to confirm. There is no legal timeframe , and it does depend on the reason for refund as well. For example if a Supplier goes bust, the refund should be quick.
Is there a time limit for making a claim under Section 75?
There is no time limit for making a Section 75 claim, however you have 6 years to make a claim through court so you’ll not have much joy after that.
What if I want to make a claim but I have cancelled the credit card?
You can still make a Section 75 claim even if you have cancelled the card you originally made the purchase on. Just contact the card provider with as much information as possible. Not having the card just makes it a little more difficult to pin the purchase down.
Are consequential losses covered under Section 75?
Consequential losses are costs caused by the problem with your purchase and can be claimed. A few years ago I bought a second hand car on my credit card. (Always do this by the way). Cutting a (very) long story short, the car was less than 6 months old and the gearbox and clutch went. The garage had disappeared so I made a S75 claim. This was with Nationwide Credit card by the way. They refused my claim. Fast forward 10 months, with the involvement of the Ombudsman, I was refunded the full original cost of the car, recovery, storage, independent inspection costs and interest.
The costs have to be as a direct result of the problem, and not covered elsewhere – for example on your travel insurance.
My credit card is linked to PayPal – am I covered?
We have our Amex linked to PayPal so we can get the Amex points from places that do not accept Amex. However – Section 75 protection is available for purchases made on your credit card – NOT through third parties. So your card may be linked to your PayPal account, but PayPal is the payment method so you are not covered.
I don’t want a Credit card, how else can I get this protection?
You can only get this free and valuable protection when paying by credit card. There are many people who do not want credit cards for various reasons. I would say for any major purchases where there could be the potential for an issue then consider getting one, with a small credit limit, and set up a direct debit to pay off in full.
Here’s a really useful article from Smarter Finances Things To Know Before Getting A Credit Card – Smarter Finances
You do not need to pay for the whole purchase by Credit card. Even if you just pay a deposit – you will get the full Section 75 protection on your purchase.
Have a look at the credit cards from HSBC and more information on Section 75
Any questions? Drop them in the comments and we will add them to this article and answer.
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I didn’t actually know what Section 75 was or what it meant, but I’ve always tried tor put big purchases on a credit card as a backup (plus we get points with our american express card). Really interesting to read more about what it actually means x
This is why I tend to use my credit card rather than debit card for big purchases, it is really reassuring. Mich x
This is a really informative write up. It reinforces my thoughts about using my credit card for large purchases and holidays for the Section 75 protection and peace of mind aspect.
Thank you.
This was very informative post. Thank you for sharing this information.