Consumer Credit Act

One of the important advantages that comes with owning a credit card is the protection provided under Section 75 of the Consumer Credit Act. If there is a problem with a retailer or anyone else who has supplied you with goods or services, you may be entitled to a refund of your payment. Your credit card provider can essentially be just as liable as your supplier to provide you with the service you expected. Therefore, you can claim from your card company if the supplier is being uncooperative or has gone out of business.

To be eligible under section 75, certain conditions must be satisfied. Most of your purchases will be covered, as long as they:

• have a value between £100 and £30,000; and
• were a 'purchase', as opposed to 'cash advance', 'balance transfer' or 'credit card cheque'

You should try to resolve the problem with the supplier first. Your supplier is anyone who has provided you with goods or services, such as a shop or a repair centre. Contacting them first may enable you to resolve the problem satisfactorily. For example, they may offer you a refund, a repair or a replacement of defective goods. If they do not offer a satisfactory solution to the problem, you may be able to make a claim from your credit card provider.

Your claim against a supplier is only valid if there is a breach of contract or a misrepresentation, such as if you paid for your notebook to be repaired but they failed to fix the fault as they promised, or if you paid for delivery of a new stereo system and it never arrived. Currently, if you make a purchase abroad it is not necessarily covered under section 75. Some banks voluntarily offer the same protection, but the Office of Fair Trading (OFT) are currently consulting with credit card providers to determine whether this should be made compulsory.

If you need to make a claim, contact your credit card provider by post enclosing detailed documentation to support your request. For instance, if a computer repair shop has charged you for fixing a problem but has not repaired your laptop as promised, you should provide the original repair quotation and evidence that the problem has not been remedied. Most card providers will accept your claim and automatically freeze the amount initially charged to your card for the repairs, so that this does not accrue interest while your case is being investigated. However, you should state in your letter that you will not pay any money unless your claim is rejected and that interest should not be charged on the sum until investigations are complete, because some credit card providers may not do this automatically.

If you do not receive a satisfactory reply from your credit card company, you may pursue the case further with supplementary evidence, such as correspondence you had with the supplier. Do not be deterred if at first they are uncooperative: if you feel you have a valid claim, write to them once again. You may also wish to take up your case with the Financial Ombudsman Service (FOS), if you feel your card provider has not been of assistance. For more details see Complaints Procedure.