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Common myths about 'Section 75'

Date published: 24 October 2024 Section 75 : Category

'Section 75’ of the Consumer Credit Act 1974 covers purchases made with certain types of credit, including credit cards.

You might be able to claim money back from the credit provider if a product is faulty, doesn’t arrive or wasn’t as described, and you can’t resolve the problem direct with the supplier. However, all purchases must meet certain criteria for a claim to be considered. 

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‘Section 75’ - shorthand for Section 75 of the Consumer Credit Act 1974 – covers purchases made by a credit card, point-of-sale loan (a loan arranged by the retailer to pay for goods) or other finance.

Subject to certain criteria, 'Section 75' can offer protection for purchases and you might be able to claim money back from the credit provider if you can’t resolve a problem about goods or services direct with the supplier.

But, each year, we receive thousands of complaints from consumers who have had their claims for money back rejected by their credit provider.

Understanding your rights

  • Not understanding the rules around ‘Section 75’ claims could affect your chances of getting your money back, and there are some common myths and misconceptions about how 'Section 75' works that can affect your chances of getting a refund.

    1. Myth: It’s only for credit cards

    Fact: Section 75 can apply to point-of-sale loans used to buy goods or services, as well as some store cards and catalogue accounts. It doesn’t apply to purchases paid wholly by debit card or bank transfer.

    1. Myth: It applies to products and services of any value

    Fact: The cash price of the goods or services must be more than £100 but not more than £30,000. This is the cost per item – a purchase of multiple items which added up to more than £100 wouldn’t qualify unless they were sold as a set. 

    1. Myth: The whole amount must have been paid by credit

    Fact: It's the cash price of the goods or services that matters, not what you paid on your credit card or loan. Section 75 applies even if you only made part of the payment using credit.

    1. Myth: It doesn’t matter who used the credit card

    Fact: Section 75 only applies if the primary cardholder uses the credit card to purchase something for themselves.

    1. Myth: There’s no other option if my bank rejects my claim

    Fact: You can complain to your credit provider and ask them to look again at your claim. If you’re still not happy, you can bring your complaint to us for free.

How we can help

If you feel you’ve been treated unfairly by your credit provider, you should complain to the them first. But if you’re still unhappy and want to take your complaint further, we may be able to help.

To help improve understanding of the issues involved,  we share case studies that illustrate the type of complaints we see.

  • A consumer came to the Financial Ombudsman Service when his bank refused his Section 75 claim. His wife, a secondary cardholder on his credit card account, purchased a dress which was sold as being part of a new collection. She later found out that it had also been sold the previous year. The consumer’s wife felt that the dress had been misrepresented so submitted a Section 75 claim, but the bank refused it. The Financial Ombudsman agreed the bank was right to reject the claim as the primary cardholder hadn’t been involved in the purchase. 

  • Around 18 months after purchasing a new sofa on credit, a consumer began to experience problems with the product. The warranty company conducted a report and the consumer was happy to accept a repair, but by that time, the company she had purchased the sofa from had entered administration. She wasn’t able to use the sofa so disposed of it and approached the credit company for a refund. They refused the claim, but the Financial Ombudsman said that the sofa wasn’t of satisfactory quality and upheld the complaint. 

  • In another case, a consumer came to the Ombudsman when their credit card company refused their Section 75 claim for a comedy event which was cancelled when the organiser entered administration. He had spent £209 for four tickets costing £45 each, £10 for “premium parking” and a £19 booking fee. The credit card company refused his claim as none of the tickets were more than £100 in price. The Ombudsman agreed the company was right to reject the claim for this reason.

  • After a holiday accommodation provider cancelled a booking and didn’t provide a refund, a consumer made a Section 75 claim to their credit card provider. Of the total £5,000 cost, they had paid £1,250 on their credit card and the remaining £3,750 by bank transfer. Her credit card company refused the claim, but the Financial Ombudsman found that they should give the customer all of the money back with interest.

Bringing your complaint to us

Getting a fair answer is free and easy.

When you bring a complaint to us, it's our job to weigh up all the facts. We’ll make a decision about what happened using evidence from you, the financial business and any relevant third parties. We'll also consider:

  • the relevant law
  • any regulations that applied at the time
  • any industry codes of conduct that were in force at the time

When we've finished investigating, we’ll tell you whether we think the business treated you fairly or not. And we’ll explain how we reached our decision.

If we think the business treated you unfairly, we'll tell them to put you back where you'd be if they hadn't made a mistake. We might also ask them to make an award for any distress and inconvenience caused.