Section 75 of the Consumer Credit Act 1974: The Complete 2025 Guide to Credit Card Protection

When your purchase goes wrong—whether the goods never arrive, the company goes bust, or the product is fundamentally faulty—Section 75 of the Consumer Credit Act 1974 provides one of the most powerful consumer protections available in the UK. This statutory right makes your credit card provider jointly liable with the seller for breaches of contract and misrepresentation, potentially saving you thousands of pounds when things go wrong.

In 2024, the Financial Ombudsman Service handled over 60,000 credit card complaints, with 34% of disputed cases resolved in favour of consumers. Many of these involved Section 75 claims where cardholders successfully recovered their money after suppliers failed to deliver. Understanding how to use this protection effectively could be the difference between losing money forever and getting a full refund.

This comprehensive guide explains exactly how Section 75 works, when you can use it, real cases that have succeeded, step-by-step claiming instructions, and what to do if your credit card company refuses to pay.

What is Section 75 and Why Does It Matter?

Section 75 of the Consumer Credit Act 1974 is a UK law that makes your credit card provider equally responsible with the supplier when you buy goods or services costing between £100 and £30,000. If the supplier breaches their contract with you, misrepresents what they're selling, or simply disappears with your money, you can claim the full amount back from your credit card company.

This "joint and several liability" means you don't have to pursue the original seller at all—you can go straight to your credit card provider. This is particularly valuable when:

• •The company has gone bust (airlines, travel companies, retailers)
• •The seller is overseas and difficult to pursue legally
• •The product is fundamentally different from what was described
• •Services were never provided as promised
• •The seller refuses to engage with your complaint

The protection exists because when you use a credit card, you're technically borrowing money from the card issuer to pay the merchant. Parliament decided that since the card company profits from these transactions (through merchant fees and interest), they should share responsibility when things go wrong.

The Key Financial Thresholds

For Section 75 to apply, the item or service must cost:

• •Minimum: £100 (the individual item price, not your total basket)
• •Maximum: £30,000 (per item)

These thresholds apply to the cash price of the item, not how much you paid on your credit card. This is crucial because:

Example 1: You buy a sofa for £1,200 and pay a £50 deposit on your credit card. The sofa is covered by Section 75 because its total price (£1,200) falls within the £100-£30,000 range—even though you only put £50 on credit.

Example 2: You buy five items totalling £500, but each item costs £80. Section 75 does NOT apply because no single item reaches the £100 threshold.

Example 3: You book a holiday package for £4,000. The package as a whole is one "item" for Section 75 purposes, so you're covered even if you paid just a deposit by credit card.

When Can You Make a Section 75 Claim?

Breach of Contract

The most common ground for Section 75 claims is breach of contract. This occurs when the seller fails to fulfil their side of the agreement. Examples include:

• •Non-delivery: Goods or services never arrive
• •Late delivery: Significant delays that breach contractual terms
• •Faulty goods: Products that don't work properly or break prematurely
• •Services not as described: What you received differs materially from what was promised
• •Company insolvency: The business ceases trading before fulfilling your order

Misrepresentation

You can also claim under Section 75 when the seller made false statements that induced you to buy. This includes:

• •Fraudulent misrepresentation: The seller deliberately lied about the product
• •Negligent misrepresentation: The seller made false statements carelessly
• •Innocent misrepresentation: False statements made in good faith but still untrue

For example, if a car dealer told you a vehicle had never been in an accident when it had, or a holiday company showed photos of a luxury hotel but booked you into a building site, these would be misrepresentation claims.

What Section 75 Does NOT Cover

Understanding the limitations is as important as knowing your rights:

• •Items under £100 or over £30,000: Outside the financial thresholds
• •Debit card purchases: Section 75 only applies to credit cards (not debit cards, charge cards without credit facility, or prepaid cards)
• •Business purchases: Generally not covered unless the credit card is in your personal name for a sole trader
• •Additional cardholders: The claim must come from the main account holder
• •Purchases through third-party payment processors: PayPal, Klarna, Clearpay purchases may not be covered (see detailed section below)
• •Goods bought outside the UK from non-UK companies: Complex rules apply; see overseas purchases section

The History and Legal Foundation of Section 75

Understanding where Section 75 came from helps explain why it's structured the way it is and how courts interpret it today.

The Crowther Committee and Consumer Credit Reform

In the late 1960s, the UK government commissioned a major review of consumer credit law. The Crowther Committee, chaired by Lord Crowther, spent three years examining how credit worked in practice and where consumers were being harmed.

The Committee's 1971 report identified a crucial problem: when consumers used credit to buy defective goods or services, they were caught between two parties. The supplier might be insolvent, overseas, or simply uncooperative. Meanwhile, the finance company (or credit card issuer) would wash its hands of responsibility, saying "we just provided the money—take your complaint to the seller."

This left consumers in an impossible position. They still owed money on their credit cards while having no realistic way to get compensation for faulty purchases.

Parliament's Solution: Joint Liability

The Consumer Credit Act 1974 implemented the Crowther Committee's key recommendation: making creditors jointly liable with suppliers for breaches of contract and misrepresentation. Section 75 states:

"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."

In plain English: if the seller breaks their contract or lies to you, you can pursue the credit card company instead of (or as well as) the seller. The credit card company is treated as if they were the seller for liability purposes.

Why Credit Card Companies Accepted This

You might wonder why banks and credit card companies didn't fight harder against Section 75. The answer lies in the economics of credit card transactions:

• •Merchant fees: Card companies earn 1-3% on every transaction. This fee partially compensates for Section 75 risk.
• •Interest income: Many cardholders carry balances and pay significant interest.
• •Consumer confidence: Section 75 encourages people to use credit cards for major purchases, increasing transaction volume.
• •Limited actual cost: The vast majority of transactions complete without problems. Section 75 claims represent a tiny fraction of card spending.

The banks essentially made a bargain: accept joint liability in exchange for the vast profitable activity that credit cards generate.

Key Court Cases That Shaped Section 75

Several important legal decisions have defined how Section 75 works in practice:

Office of Fair Trading v Lloyds TSB Bank (2007): This House of Lords case confirmed that Section 75 applies to overseas transactions where the purchase has sufficient UK connection. The OFT challenged banks that were refusing foreign transaction claims, and won.

Jarrett v Barclays Bank (1999): Established that a credit card company cannot escape Section 75 liability by including exclusion clauses in their terms and conditions. The statutory protection overrides contract terms.

Re Charge Card Services Ltd (1989): Though not directly about Section 75, this case clarified the tripartite relationship between cardholder, card company, and merchant—legal foundations that underpin Section 75 claims.

Real Cases: How Section 75 Has Helped Consumers

Understanding how Section 75 works in practice is best illustrated through real cases decided by the Financial Ombudsman Service (FOS).

Case Study 1: Mrs K and the Failed Airline

The situation: Mrs K booked flights costing £1,847 for a family holiday through an online travel agent. She paid £500 as a deposit using her credit card, with the remainder due closer to departure. Before the final payment date, the travel agent went into administration and the airline cancelled her booking.

The claim: Mrs K submitted a Section 75 claim to her credit card provider for the full £1,847 ticket cost.

The card company's response: Initially refused, arguing they were only liable for the £500 actually charged to the card.

The Ombudsman's decision: Upheld Mrs K's complaint. Under Section 75, the credit card company is liable for the full price of the item purchased, not just the amount charged to the card. The Ombudsman directed the card company to refund £1,847 plus 8% simple interest from the date the claim was made.

Key lesson: A small deposit on your credit card protects the entire purchase price.

Case Study 2: Mr M and the Ferry Company Collapse

The situation: Mr M booked ferry crossings totalling £2,340 for multiple trips throughout the year. He paid using his credit card. The ferry company entered administration two months later, before Mr M could take any of his booked crossings.

The claim: Mr M claimed the full £2,340 from his credit card provider under Section 75.

The card company's response: Accepted liability and refunded the full amount within 14 days.

Key lesson: When suppliers go bust, Section 75 provides immediate recourse without having to join lengthy insolvency proceedings where unsecured creditors typically receive pennies on the pound.

Case Study 3: The Faulty Sofa Saga

The situation: A consumer purchased a leather sofa for £3,500, paying by credit card. Within 8 months, the leather began peeling and cracking. The retailer initially agreed to replace the sofa but then ceased trading before the replacement arrived.

The claim: The consumer submitted a Section 75 claim citing both breach of contract (faulty goods under the Consumer Rights Act 2015) and the supplier's failure to provide the promised replacement.

The card company's response: Requested an independent inspection report.

The outcome: After the report confirmed the leather was of unsatisfactory quality, the card company refunded the full £3,500.

Key lesson: Having evidence (photos, expert reports, contemporaneous communications) strengthens your claim significantly.

Case Study 4: The Wedding Photography Disaster

The situation: A couple paid £2,800 for wedding photography services, with £1,000 deposit by credit card. The photographer attended the wedding but delivered only 47 poorly edited images instead of the 500+ professional photos promised in the contract.

The claim: The couple claimed for breach of contract, arguing the services provided were fundamentally different from what was agreed.

The card company's response: Initially disputed, suggesting the couple had received "some" service so Section 75 didn't apply.

The Ombudsman's decision: Found in favour of the couple. The Ombudsman determined that delivering 47 substandard photos when 500+ professional images were contractually promised constituted a fundamental breach of contract. The card company was ordered to refund £2,800.

Key lesson: Even when some service is provided, if it's materially different from what was contracted, Section 75 applies.

Case Study 5: The Timeshare Misrepresentation

The situation: Mr and Mrs D purchased timeshare points for £15,000 after attending a high-pressure sales presentation. The salesperson claimed they could easily rent out unused weeks for profit and that the points would appreciate in value. Neither claim proved true.

The claim: The couple claimed misrepresentation under Section 75, arguing the sales claims induced them to purchase.

The card company's response: Rejected initially, stating it was a "he said/she said" situation.

The Ombudsman's decision: Upheld the complaint. The Ombudsman found that the sales claims (rental income, appreciation) were demonstrably false and material to the purchase decision. The card company was directed to refund £15,000 plus interest.

Key lesson: Keep written records of sales claims—emails, brochures, text messages—to prove misrepresentation.

Case Study 6: The Car with Hidden Accident Damage

The situation: Mr T purchased a used car for £8,500 from a dealer, paying £2,000 deposit on his credit card and the balance by bank transfer. The dealer described the vehicle as "excellent condition, no accident history." Six months later, during routine maintenance, Mr T's garage discovered extensive repair work from a previous front-end collision, including welded chassis sections that compromised the car's structural integrity.

The claim: Mr T argued the dealer had misrepresented the car's history, making it worth significantly less than paid and potentially dangerous.

The card company's response: Initially rejected, arguing they were only liable for the £2,000 deposit.

The Ombudsman's decision: Found in Mr T's favour for the full £8,500. The Ombudsman confirmed that under Section 75, the card company is liable for the entire purchase price when misrepresentation is proven, regardless of what portion was paid by credit card. Additionally, the Ombudsman awarded £300 for distress and inconvenience due to the safety concerns.

Key lesson: Even when credit card payment is just a small fraction of the total, Section 75 protects the entire transaction value.

Case Study 7: The Home Improvement Disaster

The situation: Mrs L hired a building company to install a new kitchen for £12,000. She paid a £3,000 deposit by credit card. The company began work but then abandoned the project halfway through, leaving her with a demolished old kitchen, a partly installed new one, and no working facilities. The company then went into liquidation.

The claim: Mrs L claimed for breach of contract, seeking not just the £3,000 deposit but also the cost of hiring another company to complete the work (an additional £6,000) and temporary accommodation costs (£800).

The card company's response: Agreed to refund the £3,000 deposit but disputed the consequential losses.

The Ombudsman's decision: Awarded Mrs L the full £3,000 deposit plus £5,000 towards completion costs. The Ombudsman noted that consequential losses are recoverable under Section 75 where they flow naturally from the breach and were foreseeable. The accommodation costs were deemed too remote as she had family nearby she could have stayed with.

Key lesson: Section 75 can cover consequential losses beyond the original purchase price, but you must demonstrate these were reasonable and foreseeable consequences of the breach.

Case Study 8: The Online Marketplace Purchase

The situation: Ms H bought a designer handbag for £650 through an online marketplace, paying via credit card. The bag arrived but was a counterfeit. The seller (a third-party using the marketplace platform) disappeared, ignoring all communications.

The claim: Ms H filed a Section 75 claim against her credit card provider for misrepresentation (the bag was described as authentic when it was fake).

The card company's response: Rejected the claim, arguing the marketplace platform (not the individual seller) was the "supplier" and that the platform itself hadn't misrepresented anything.

The Ombudsman's decision: Upheld Ms H's complaint. The Ombudsman determined that for Section 75 purposes, the "supplier" is the party selling the goods—here, the individual marketplace seller. The platform merely facilitated the transaction. The misrepresentation by the seller about authenticity was actionable.

Key lesson: When buying through marketplaces (eBay, Amazon third-party sellers, etc.), the individual seller is typically the "supplier" for Section 75 purposes, even though payment flows through the platform.

2024-2025 Statistics: Section 75 Claims in Numbers

Understanding the scale and success rates of Section 75 claims helps set realistic expectations for your own situation.

Financial Ombudsman Service Data

In the second half of 2024, the FOS reported:

• •217,160 total credit card complaints received
• •60,364 credit card complaints fully investigated
• •34% of investigated complaints upheld in favour of consumers
• •Average processing time: 4-6 months for standard cases
• •Complex cases (involving misrepresentation, overseas suppliers): 8-12 months

Breakdown by Complaint Type

The FOS categorizes credit card complaints into several types:

| Category | Percentage | Common Section 75 Involvement | |----------|------------|------------------------------| | General administration | 28% | Low | | Charges, fees, interest | 24% | Low | | Transaction disputes | 21% | High (includes Section 75) | | Fraud and scams | 15% | Medium | | Lending decisions | 12% | Low |

Transaction disputes—where Section 75 claims typically fall—represent about one-fifth of all credit card complaints.

Success Rate Factors

Research into FOS decisions reveals that certain factors significantly impact claim success:

Higher success rates:

• •Clear documentary evidence (receipts, contracts, photographs)
• •Company insolvency (supplier gone bust)
• •Explicit written misrepresentations
• •Claims filed promptly after problems arise

Lower success rates:

• •Verbal-only representations ("he said/she said")
• •Delayed complaints (years after purchase)
• •Partial service delivery disputes
• •Complex PayPal/intermediary chains

Major Company Failures: Section 75 in Action

Recent years have seen several high-profile company collapses where Section 75 provided crucial protection:

Thomas Cook (2019): When the travel giant collapsed with 150,000 customers abroad, credit card holders recovered their money through Section 75 far faster than those claiming through ATOL or insurance.

Flybe (2020, 2023): Both collapses of this regional airline saw thousands of credit card holders successfully claiming refunds within weeks.

WOW Air (2019): Icelandic airline's sudden shutdown left UK passengers stranded. Section 75 claims were processed within the standard timeframes despite the international nature.

Made.com (2022): When the furniture retailer collapsed, customers who had paid deposits by credit card for undelivered furniture recovered their money through Section 75, while those who paid by debit card or bank transfer faced lengthy insolvency proceedings.

Section 75 vs Chargeback: Understanding the Difference

Many consumers confuse Section 75 with chargeback, but they're fundamentally different protections with different rules and outcomes.

Section 75: Your Statutory Rights

| Aspect | Section 75 | |--------|-----------| | Legal basis | Consumer Credit Act 1974 (statute law) | | Applies to | Credit cards only | | Financial limits | £100 - £30,000 per item | | Time limit | 6 years (England/Wales), 5 years (Scotland) | | Amount claimable | Full price of item/service | | Consequential losses | Yes, can claim related costs | | Card company's role | Legally liable as joint debtor |

Chargeback: A Voluntary Scheme

| Aspect | Chargeback | |--------|-----------| | Legal basis | Visa/Mastercard scheme rules (not law) | | Applies to | Any card (credit, debit, prepaid) | | Financial limits | No minimum; no maximum | | Time limit | Usually 120 days from transaction | | Amount claimable | Amount charged to card only | | Consequential losses | No | | Card company's role | Facilitator, not liable party |

Which Should You Use?

Use Section 75 when:

• •The item costs £100-£30,000
• •You used a credit card
• •You want to claim the full price (even if you only paid a deposit)
• •You have consequential losses (hotel costs due to cancelled flights, etc.)
• •The 120-day chargeback window has passed
• •The merchant is contesting a chargeback

Use Chargeback when:

• •The item costs under £100
• •You used a debit card or prepaid card
• •You need quick resolution (chargebacks often resolve faster)
• •The transaction is recent (within 120 days)
• •Section 75 doesn't apply for technical reasons

Strategic tip: You can pursue both simultaneously. Start a chargeback for quick resolution while documenting your Section 75 claim. If chargeback succeeds, you've won. If it fails or the merchant contests it, fall back on Section 75.

The PayPal and Third-Party Payment Problem

One of the most contested areas of Section 75 law involves purchases made through payment intermediaries like PayPal, Klarna, Clearpay, or Amazon Pay. The issue is whether Section 75 applies when you pay a third party who then pays the merchant.

The "Debtor-Creditor-Supplier" Chain

Section 75 requires a direct debtor-creditor-supplier (D-C-S) relationship:

• •Debtor: You (the cardholder)
• •Creditor: Your credit card company
• •Supplier: The merchant selling goods/services

When you pay via PayPal, the chain becomes:

• •You → Credit card company → PayPal → Merchant

Some credit card companies argue this "breaks" the D-C-S chain because PayPal, not the merchant, is the direct recipient of the credit card payment.

Current Legal Position

The Financial Ombudsman Service has taken a consumer-friendly interpretation in many cases, particularly when:

• •PayPal acts merely as a payment processor rather than the actual supplier
• •The merchant is clearly identifiable as the party responsible for the goods/services
• •PayPal's involvement doesn't fundamentally change the transaction nature

However, outcomes are inconsistent. Some card companies accept PayPal-mediated Section 75 claims; others reject them. The safest approach is:

• •Pay the merchant directly with your credit card when possible
• •Avoid PayPal "Buyer Protection" for large purchases—it may give card companies an excuse to reject Section 75
• •Document the underlying transaction even when paying through intermediaries
• •Escalate to the Ombudsman if your card company rejects a claim purely on PayPal grounds

Buy Now Pay Later (BNPL) Services

Services like Klarna and Clearpay present different issues. When you "pay in 3" or defer payment:

• •If Klarna/Clearpay extends you credit: Section 75 may apply against Klarna/Clearpay as the creditor
• •If using their "Pay Now" feature linked to your credit card: Section 75 status is unclear; treat as PayPal situation above

The FCA has indicated increased regulation of BNPL is coming, which may clarify consumer protections in this space.

Overseas Purchases: Does Section 75 Apply?

Section 75 can apply to purchases from overseas merchants, but the rules are nuanced.

The General Rule

Section 75 applies when:

• •The credit agreement is made in the UK (your credit card is issued by a UK bank)
• •AND the transaction has a UK connection

The "UK connection" can be satisfied if:

• •The merchant has a UK presence (even just a UK website targeting UK consumers)
• •The contract was formed in the UK
• •The goods/services were to be delivered/provided in the UK

Practical Examples

Covered: You book a hotel in Spain through Booking.com (Netherlands company with UK operations) using your UK credit card. The hotel goes bust. Section 75 likely applies.

Covered: You buy a watch from a German retailer that specifically advertises to and ships to UK customers. Section 75 likely applies.

Unclear: You visit a shop in New York during your holiday and buy a handbag with your UK credit card. The bag is counterfeit. Section 75 application is uncertain—no UK connection beyond your card.

Strategic Advice for Overseas Purchases

• •Book through UK-based intermediaries where possible (UK travel agents, UK websites)
• •Keep records of the merchant's UK marketing, UK delivery, UK customer service
• •Check ATOL protection for flights/holidays—this provides backup protection
• •Consider travel insurance as additional security for overseas transactions

How to Make a Section 75 Claim: Step-by-Step Guide

Step 1: Gather Your Evidence

Before contacting your card company, compile:

• •Proof of purchase: Credit card statement showing the transaction
• •Contract/receipt: What exactly was purchased and for how much
• •Evidence of the problem: Photos, videos, correspondence with the seller
• •Proof of attempts to resolve: Emails/letters showing you tried to resolve with the merchant first
• •Expert reports: If relevant (e.g., surveyor report for property issues, mechanic report for car problems)

Step 2: Attempt Resolution with the Merchant

While not legally required, card companies expect you to try the merchant first. Send a clear complaint letter:

• •State what you bought and when
• •Explain what went wrong
• •Specify what resolution you want (refund, repair, replacement)
• •Set a reasonable deadline (14 days is standard)
• •Keep copies of everything

If the merchant doesn't respond, goes bust, or refuses reasonable resolution, proceed to your card company.

Step 3: Submit Your Section 75 Claim

Contact your credit card provider's disputes or claims department. You'll typically find details:

• •On the back of your credit card
• •On your statement
• •In your online banking portal under "disputes" or "claims"

Your claim should include:

Essential information:

• •Your full name and card number (or last 4 digits)
• •Transaction date and amount
• •Merchant name
• •Clear description of the breach of contract or misrepresentation
• •What you're claiming (full refund, partial refund plus consequential losses)

Template opening paragraph:

"I am writing to make a claim under Section 75 of the Consumer Credit Act 1974. On [date], I purchased [item/service] from [merchant] for £[amount] using my credit card ending [last 4 digits]. The supplier has breached the contract / made misrepresentations [delete as appropriate] as detailed below, and I am exercising my statutory right to claim against you as jointly liable."

Step 4: Follow Up and Document

• •Get a reference number for your claim
• •Keep a timeline of all communications
• •Follow up in writing after 14 days if no response
• •Escalate within the bank to a manager if initial handlers are unhelpful

Step 5: Respond to Information Requests

Your card company may ask for:

• •Additional documentation
• •Expert reports
• •Proof of loss
• •Details of any partial resolution with the merchant

Provide requested information promptly. Delays give the card company grounds to close your claim.

What If Your Claim Is Rejected?

Card companies sometimes reject valid Section 75 claims. Common reasons (and how to challenge them):

"The item cost under £100"

If incorrect: Provide evidence of the actual price. Remember, it's the item's full price that matters, not what you put on the card.

If basket vs item issue: If you bought multiple items, identify which single item exceeded £100 and claim for that item.

"You used a debit card / PayPal / etc."

If incorrect: Provide statement showing it was a credit card transaction.

If PayPal: Argue the D-C-S chain is intact; escalate to Ombudsman if rejected.

"We're not liable because [reason]"

Common bad reasons:

• •"You should have claimed under warranty first" — No, Section 75 is independent
• •"The merchant is offering a repair/replacement" — You can reject this if goods fundamentally faulty
• •"You received some service" — Fundamental breach still applies if service materially different from contracted
• •"Too much time has passed" — Time limit is 6 years, not the 120 days they might suggest

Escalation Path

• •Internal complaint: Write a formal complaint to the card issuer
• •Final response: They must issue a final response within 8 weeks
• •Financial Ombudsman Service (FOS): If unsatisfied, escalate to FOS within 6 months of the final response

Escalating to the Financial Ombudsman Service

The FOS provides free, independent dispute resolution for financial complaints. In 2024, they handled over 60,000 credit card complaints, upholding 34% fully in consumers' favour with many more reaching compromise settlements.

When to Use the Ombudsman

You can escalate when:

• •Your card company has issued a final response rejecting your claim
• •8 weeks have passed since your initial complaint without resolution
• •You're within 6 months of the final response letter

How to Submit a Complaint

Online: www.financial-ombudsman.org.uk (fastest method) Phone: 0800 023 4567 Post: Financial Ombudsman Service, Exchange Tower, London E14 9SR

Your submission needs:

• •Your details and card company details
• •Summary of your complaint
• •What outcome you want
• •Copies of key evidence
• •The final response letter (if received)

What to Expect

• •Acknowledgment: Within 5 working days
• •Initial assessment: Ombudsman will review and may request more information
• •Investigation: Average 4-6 months for credit card complaints
• •Outcome: Either an informal resolution or formal Ombudsman decision
• •Binding decision: If you accept an Ombudsman decision, it's binding on the card company (they must comply). You can reject it and pursue court action instead, though you'd lose Ombudsman assistance.

Tips for Ombudsman Success

• •Be concise and factual: Emotional pleas are less effective than clear evidence
• •Reference relevant rules: Cite Section 75 specifically and explain how it applies
• •Quantify your loss: Specify exact amounts you're claiming
• •Include evidence: But don't overwhelm with irrelevant documents
• •Explain why you disagree with the card company's reasons for rejection

Taking Legal Action: Small Claims Court

If the Ombudsman route fails or isn't suitable, you can pursue your claim through the courts. For claims up to £10,000 (England/Wales), this means the small claims track, designed for individuals without lawyers.

Advantages of Small Claims

• •Low court fees: £35-£455 depending on claim value
• •No lawyer needed: Procedures designed for lay people
• •Limited costs risk: Normally can't be ordered to pay the other side's legal costs
• •Informal hearings: Judges actively help unrepresented parties

How to Start a Claim

• •Send a "Letter Before Action": Give the card company 14 days to pay before issuing court proceedings
• •Issue claim online: Use Money Claims Online (www.moneyclaims.service.gov.uk)
• •Pay the court fee: Based on claim amount (e.g., £115 for claims up to £1,500)
• •Serve the claim: Court sends it to the card company
• •Await response: They have 14-28 days to respond
• •Hearing: If they dispute, a court hearing is scheduled

What You Need to Prove

For Section 75 claims, you must show:

• •You made a purchase using a credit card
• •The purchase was between £100 and £30,000
• •There was a breach of contract or misrepresentation by the supplier
• •You suffered loss as a result

Legal Costs You Can Claim

• •Court fees
• •Expert report costs (if ordered)
• •Reasonable travel expenses to court
• •Interest on the sum owed (8% simple interest per year is standard)

Time Limits: How Long Do You Have?

Understanding limitation periods is crucial—wait too long and you lose your rights entirely.

England, Wales, and Northern Ireland: 6 Years

The Limitation Act 1980 gives you 6 years from the date the breach of contract occurred (typically when you should have received the goods/services or when defects became apparent).

Scotland: 5 Years

The Prescription and Limitation (Scotland) Act 1973 provides a 5-year limitation period.

When Does Time Start Running?

• •Non-delivery: From the date goods should have been delivered
• •Faulty goods: From delivery (or when fault became/should have become apparent)
• •Services: From when service should have been completed
• •Misrepresentation: From when you reasonably discovered the misrepresentation

Strategic Timing Considerations

• •Don't delay: Evidence degrades, memories fade, companies restructure
• •Early claims are stronger: Judges view delay skeptically
• •Interrupt limitation: Sending a Letter Before Action or issuing court proceedings stops time running
• •Card company delays don't extend limits: Their slow handling doesn't give you more time

Template Letters for Section 75 Claims

Having the right words can make a significant difference to how your claim is processed. Here are template letters you can adapt for your situation.

Template 1: Initial Section 75 Claim Letter

 [Your Name] [Your Address] [Date]


[Credit Card Company Name] [Address]

Re: Section 75 Claim – Card ending [XXXX] – Transaction date [DD/MM/YYYY]

Dear Sir/Madam,

I am writing to make a formal claim under Section 75 of the Consumer Credit Act 1974.

TRANSACTION DETAILS:

•Merchant name: [Supplier name]
•Transaction date: [Date]
•Amount: £[Total purchase price]
•Amount charged to card: £[Amount on card]
•Description: [Brief description of goods/services]


NATURE OF CLAIM: [Choose and adapt one of the following]

Breach of Contract: The supplier has failed to fulfil their contractual obligations because: [Describe specifically what went wrong – non-delivery, faulty goods, services not as agreed]

Misrepresentation: The supplier made false statements which induced me to make this purchase: [Describe the false statements and how they differed from reality]

EVIDENCE ENCLOSED:

•Credit card statement showing the transaction
•[Contract/receipt/order confirmation]
•[Correspondence with supplier]
•[Photographs/reports/other evidence]


CLAIM AMOUNT:
I am claiming the total sum of £[amount], being:

•Purchase price: £[X]
•[Consequential losses if applicable]: £[X]
•Total: £[X]


Under Section 75, you are jointly and severally liable with the supplier for this breach/misrepresentation. I request that you investigate this matter and arrange a full refund within 14 days.

Please acknowledge receipt of this claim and provide a reference number.

Yours faithfully,

[Your signature] [Your name] [Your contact number] [Your email address] 

Template 2: Follow-Up Letter After Rejection

 [Your Name] [Your Address] [Date]


[Credit Card Company Name] [Address]

Re: Formal Complaint – Section 75 Claim Rejection – Reference [XXXXX]

Dear Sir/Madam,

I am writing to formally complain about your rejection of my Section 75 claim dated [original claim date].

Your response dated [date] stated that [summarise their reason for rejection]. I do not accept this reasoning for the following reasons:

[Address each point of their rejection. For example:]


•You state that the item cost under £100. This is incorrect. The contract price for the [item] was £[X], as evidenced by the enclosed receipt/invoice.



•You state that I should pursue the supplier first. This is not a legal requirement under Section 75. The Act creates joint and several liability, allowing me to pursue either party.



•You state that too much time has passed. The limitation period for contract claims is 6 years [5 years in Scotland]. My claim is within this period.


I require you to:

•Reconsider my claim in light of the above
•Provide a substantive response addressing each point I have raised
•If you maintain your rejection, issue a Final Response Letter so I may escalate to the Financial Ombudsman Service


Please respond within 14 days. If I do not receive a satisfactory response within 8 weeks of my original complaint, I will escalate this matter to the Financial Ombudsman Service.

Yours faithfully,

[Your signature] [Your name] 

Template 3: Consequential Losses Claim

 [Your Name] [Your Address] [Date]


[Credit Card Company Name] [Address]

Re: Section 75 Claim Including Consequential Losses – Card ending [XXXX]

Dear Sir/Madam,

Further to my Section 75 claim dated [date], reference [number], I am writing to formally claim consequential losses arising from the supplier's breach of contract.

ORIGINAL PURCHASE: [Details as in original claim]

CONSEQUENTIAL LOSSES: As a direct and foreseeable result of the supplier's breach, I have incurred the following additional costs:


•[Description of loss]: £[amount]

   Evidence: [what you're enclosing]


•[Description of loss]: £[amount]

   Evidence: [what you're enclosing]

LEGAL BASIS:
Under Section 75 of the Consumer Credit Act 1974, you are jointly and severally liable with the supplier. This liability extends to consequential losses that:

•Flow naturally from the breach, and
•Were within the reasonable contemplation of the parties at the time of contract


The losses claimed above meet both requirements because [explain why these losses were foreseeable].

TOTAL CLAIM:

•Original purchase: £[X]
•Consequential losses: £[X]
•TOTAL: £[X]


I request payment of £[total] within 14 days.

Yours faithfully,

[Your signature] [Your name] 

Frequently Asked Questions

Can I claim under Section 75 if I paid the full amount on my credit card?

Yes, absolutely. Section 75 applies whether you paid the full amount, a deposit, or any portion on your credit card. The key is that the total item cost falls within £100-£30,000.

What if I paid partly by credit card and partly by cash/bank transfer?

Section 75 still applies to the entire purchase price, provided you put at least part of it on credit card. You're claiming against the card company for the breach, not just for the portion paid by card.

Can I make a Section 75 claim on a business purchase?

Generally no—Section 75 applies to consumer credit agreements. However, if you're a sole trader and the credit card is in your personal name (not a business card), you may have a valid claim. Limited company directors using company credit cards cannot claim.

Do I need to cancel my credit card after making a claim?

No. Making a Section 75 claim doesn't affect your credit card account or relationship with your bank. Many people worry their account will be closed—this almost never happens for legitimate claims.

What if the merchant offers a repair instead of a refund?

Under the Consumer Rights Act 2015, you have the right to reject goods as not of satisfactory quality within 30 days for a full refund. After 30 days, you must usually allow one repair attempt. However, if the goods are fundamentally different from what was described (misrepresentation), you can reject outright and claim via Section 75.

Can the card company refuse because I accepted partial compensation from the merchant?

It depends. If you accepted a partial settlement "in full and final settlement," you may have compromised your claim. If you accepted what the merchant offered while reserving your rights to claim the remainder, you can still pursue Section 75 for the balance.

How does Section 75 interact with travel insurance?

You can claim under both, but cannot recover more than your loss. If travel insurance pays out £500 and your loss was £2,000, you can claim the remaining £1,500 via Section 75. Some policies require you to pursue Section 75 first before they'll pay.

What about ATOL-protected holidays?

ATOL protection covers package holidays and flights from ATOL-registered travel companies if they cease trading. You can claim under both ATOL and Section 75, but again cannot recover more than your loss. Section 75 may cover additional consequential losses that ATOL doesn't.

Can I claim for digital goods and services?

Yes, Section 75 applies to digital purchases including software, subscriptions, online courses, and digital downloads—provided they cost £100 or more. The Consumer Rights Act 2015 specifically covers digital content, giving you the right to expect it to be of satisfactory quality, fit for purpose, and as described.

What if I bought something that was "as described" but I simply don't like it?

Section 75 doesn't help with buyer's remorse. It only applies when there's a breach of contract (the seller didn't deliver what was promised) or misrepresentation (the seller made false statements that induced you to buy). If the item matches its description and works as expected, you have no Section 75 claim.

However, you may have separate rights under the Consumer Contracts Regulations 2013 to return online purchases within 14 days for any reason.

Can I make a Section 75 claim if the company offered me a voucher or credit note instead of a refund?

If you're entitled to a refund (e.g., the company breached the contract), you don't have to accept vouchers or credit notes. Section 75 entitles you to monetary compensation. If the supplier tries to fob you off with store credit, you can pursue your Section 75 claim for cash.

Does Section 75 apply to gift cards I bought with a credit card?

This is a grey area. If you buy a £200 gift card with your credit card and the gift card issuer goes bust before you spend it, you may have a Section 75 claim. The argument is that the gift card is the "item" you purchased, and failure to honour it is a breach of contract.

However, some card companies argue gift cards are essentially cash equivalents. If you face rejection, escalate to the Ombudsman.

What if I paid for a service but changed my mind before it was delivered?

If you cancelled within any contractual cancellation period or cooling-off period, you're entitled to a refund regardless of Section 75. Section 75 becomes relevant if the supplier refuses to honour the cancellation or goes bust before refunding you.

Can my partner make a claim on my credit card?

Only the main cardholder can make Section 75 claims. If your partner is an additional cardholder, they cannot make claims directly—you (as the main account holder) must submit the claim.

What happens if the card company ignores my claim?

If your card company doesn't respond within a reasonable time (typically 8 weeks), you can escalate directly to the Financial Ombudsman Service without needing a final response letter. The FOS treats non-response as grounds for investigation.

Special Situations: Applying Section 75 to Common Scenarios

Wedding Services

Weddings involve multiple high-value suppliers—venues, caterers, photographers, florists, dress shops—making them prime territory for Section 75 protection. Key considerations:

Venue deposits: If you pay a £1,000 deposit on a £10,000 venue hire by credit card, the entire £10,000 is protected. If the venue cancels or goes bust, claim the full amount.

Multiple suppliers: Each supplier is a separate transaction. A photographer's £2,500 fee needs separate Section 75 consideration from a £3,000 catering deposit.

Linked transactions: If you book a "wedding package" through one company that includes multiple services, the package as a whole is one item for Section 75 purposes.

Evidence preservation: Keep all contracts, correspondence, and marketing materials from wedding suppliers. Misrepresentation claims (venue didn't match photos, etc.) need this documentation.

Home Improvements and Building Work

Home improvement projects frequently give rise to Section 75 claims due to abandoned work, poor quality, and company failures. Special considerations:

Stage payments: Builders often require stage payments. Each payment made by credit card should ideally be tied to specific deliverables. If work stops, you can claim for undelivered stages.

Consequential losses: If builders abandon work mid-project, Section 75 can cover reasonable costs to complete (though not improvements beyond the original specification).

Expert evidence: For quality disputes, an independent surveyor's report significantly strengthens your claim. Cost: typically £300-500, often recoverable as part of your claim.

Electronics and Technology

Tech purchases present unique Section 75 scenarios:

Extended warranties: If you buy a £300 TV with a £50 extended warranty, they're separate items. The TV is covered; the warranty alone isn't (under £100).

Bundles: A £250 laptop with £50 of included software is a £300 bundle—one item, Section 75 applies.

Subscriptions: Annual subscriptions over £100 (cloud storage, software licenses) are covered. Monthly subscriptions rarely reach the threshold unless you can argue the "item" is the annual commitment.

Vehicles

Car purchases are excellent candidates for Section 75 protection, with some nuances:

Deposit protection: Paying even a small deposit by credit card protects the entire purchase price.

Part-exchange: If you part-exchange an old car worth £5,000 against a £15,000 car, paying £10,000, the transaction value is complex. Most interpretations treat the £15,000 full price as the item cost, but some card companies dispute this.

Misrepresentation claims: Undisclosed accident damage, mileage discrepancies, and false service histories are all potentially actionable.

Consumer vs trader: Section 75 only applies to consumer purchases. If you buy for business purposes (even as a sole trader), protection may not apply.

Travel and Holidays

Travel purchases are among the most common Section 75 claims. Key scenarios:

Flight-only bookings: Direct airline bookings over £100 are covered. If the airline fails, claim from your card company.

Package holidays: The entire package price is one item, regardless of how many components (flights, hotel, transfers) are included.

Booking through agents: If you book via a travel agent (who then books with the airline/hotel), the agent is typically the "supplier" for Section 75 purposes. This can work in your favour if the agent fails, but may complicate claims against the underlying providers.

Accommodation-only: Direct hotel bookings over £100 are covered. If the hotel is not as described (building site next door, no pool despite website photos), this is misrepresentation.

Car hire: Pre-paid car hire over £100 is covered. Claims often arise from hidden charges, vehicle not as specified, or company failure.

Practical Tips for Maximizing Your Protection

Before You Buy

• •Use credit card for purchases £100+: Even if just for the deposit
• •Check the exact item price: Ensure individual items (not baskets) exceed £100
• •Pay the merchant directly: Avoid PayPal/Klarna for large purchases if possible
• •Save all documentation: Contracts, receipts, emails, screenshots
• •Research the company: Check reviews, financial stability, trading history

If Problems Arise

• •Act quickly: Don't let months pass hoping it'll resolve itself
• •Document everything: Photos, videos, written communications
• •Complain in writing: Creates evidence trail
• •Know your rights: Cite specific laws (Section 75, Consumer Rights Act 2015)
• •Set deadlines: Give merchants/card companies clear timeframes

During Your Claim

• •Be persistent: Don't accept initial rejections as final
• •Escalate appropriately: Internal complaints → Ombudsman → Court
• •Stay professional: Angry communications rarely help
• •Keep copies: Never send original documents
• •Calculate properly: Include consequential losses where applicable

Conclusion: Your Powerful Consumer Protection

Section 75 of the Consumer Credit Act 1974 remains one of the most valuable consumer protections available in the UK. When suppliers fail, disappear, or deceive, your credit card company provides a solvent, regulated backstop that must honour your statutory rights.

The key points to remember:

• •Use credit cards strategically: For purchases £100-£30,000, even a small deposit provides full protection
• •Document your transactions: Keep evidence of what was promised and what went wrong
• •Know the process: Claim to the card company, escalate to the Ombudsman, court as last resort
• •Don't accept wrong rejections: Many initial refusals are overcome on appeal
• •Act within time limits: 6 years (5 in Scotland) but sooner is always better

In an era of online shopping, overseas sellers, and business failures, Section 75 provides essential protection that no savvy consumer should ignore. By understanding and exercising your rights, you can shop with confidence knowing that if the worst happens, you have a clear path to recovery.

---

This guide is for informational purposes only and does not constitute legal advice. For complex cases or claims over £10,000, consider seeking professional legal advice. Consumer law changes over time—verify current regulations before making important decisions.