By Wendy and Martin Updated August 2015
Your secret financial super-hero: Section 75 laws mean your credit card must protect purchases over Ј100 for free, so if there's a problem you could get your money back.
While every effort' s been made to ensure this article's accuracy, it doesn't constitute legal advice tailored to your individual circumstances. If you act on it, you acknowledge that you do so at your own risk. We can't assume responsibility and don't accept liability for any damage or loss which may arise as a result of your reliance upon it.
What is Section 75?
It's a vital law made in the UK in the 1970s that means your credit provider must take the same responsibility a retailer does if things go wrong with a purchase. In a nutshell.
Pay for something costing between Ј100 and Ј30,000 on credit and the provider's equally liable if something goes wrong.
This isn't the credit provider being nice. It's a legal protection put in place so that you're never in the position of paying off debt for something you didn't receive or wasn't as it should've been. Whether it's a flight, kitchen, computer or anything else, pay on a credit card, store card or with store instalment credit and the credit provider's responsible too.
The law behind this
This all comes from Section 75 of the Consumer Credit Act 1974. hence why this is sexily named Section 75. It rather impenetrably says…
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.
Read it in full
(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under sub-section (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.
(3) Sub-section (1) does not apply to a claim:
(a) under a non-commercial agreement,
(b) so far as the claim relates to a single item to which the supplier has attached a cash price not exceeding Ј100 or more than Ј30,000, or
(c) under a debtor-creditor-supplier agreement for running-account credit:
(i) which provides for the making
of payments by the debtor in relation to specified periods which, in the case of an agreement which is not secured on land, do not exceed three months, and
(ii) which requires that the number of payments to be made by the debtor in repayments of the whole amount of the credit provided in each such period shall not exceed one.
(4) This section applies notwithstanding that the debtor, in entering into the transaction, exceeded the credit limit or otherwise contravened any term of the agreement.
(5) In an action brought against the creditor under sub-section (1) he shall be entitled, in accordance with rules of court, to have the supplier made a party in the proceedings.
75A - (1) If the debtor under a linked credit agreement has a claim against the supplier in respect of a breach of contract the debtor may pursue that claim against the creditor where any of the conditions in subsection (2) are met.
(2) The conditions in subsection (1) are:
(a) that the supplier cannot be traced,
(b) that the debtor has contacted the supplier but the supplier has not responded,
(c) that the supplier is insolvent, or
(d) that the debtor has taken reasonable steps to pursue his claim against the supplier but has not obtained satisfaction for his claim.
(3) The steps referred to in subsection (2)(d) need not include litigation.
(4) For the purposes of subsection (2)(d) a debtor is to be deemed to have obtained satisfaction where he has accepted a replacement product or service or other compensation from the supplier in settlement of his claim.
(5) In this section “linked credit agreement” means a regulated consumer credit agreement which serves exclusively to finance an agreement for the supply of specific goods or the provision of a specific service and where:
(a) the creditor uses the services of the supplier in connection with the preparation or making of the credit agreement, or
(b) the specific goods or provision of a specific service are explicitly specified in the credit agreement.
(6) This section does not apply where:
(a) the cash value of the goods or service is Ј30, 000 or less,
(b) the linked credit agreement is for credit which exceeds Ј60, 260, or
(c) the linked credit agreement is entered into by the debtor wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.
(8) This section does not apply to an agreement secured on land.