You will be happy to know that your purchases are guarded by the Consumer Credit Act (1974). While many do not know about its existence, this act under section 75 is an important piece of legislation for credit card users. The act compels businesses that offer goods and services to be licensed by the FCA (Financial Conduct Authority).
According to the act, you can claim a refund or replacement of good and services bought for a payment that ranges between £100 and £30,000. You are entitled to claim even if you have paid part of the cost through the credit card. This falls into picture if the cost of purchase is above £100.
What is the procedure of making a claim under section 75?
If something goes wrong with your credit card purchase then the first person to catch hold of is the trader. However, if you cannot contact the trader then you need to contact the credit card provider. The provider will resolve the issue as they work in collaboration with the trader and are jointly responsible under the act.
If the credit card company refuses to help you out then you should take the case forward to the Financial Ombudsman Service (FOS), which works as an independent mediator to resolve such cases. Contact FOS within 2 weeks of refusal of the claim. This entire process is termed as payment protection as it protects your payments from the risk of loss or bad service.
When can you not make a claim under section 75?
There are certain times when you cannot make a claim under section 75:
When you make a purchase with charge card or store card
Your purchase was either under £100 or over £30,000
If you have used a company credit card
If you have made payment through credit card cheques
If you made purchase through PayPal
The reasons for declining the claim made under the above mentioned situations are:
Charge cards requires you to pay off the monthly balance in full
Store cards have different terms and conditions to make purchases from the store
PayPal offers consumer protection but that particular aspect is not in alliance with the law and so, offering protection is left solely to their discretion
Chargeback scheme: If the purchase was under £100 then you can turn up to chargeback scheme in which your bank will contact the seller’s bank to claim the money back. This scheme is applicable only under Amex, Visa and MasterCard but, it cannot be applied as stringently as the payment protection scheme.