Section 75 and chargeback: getting money back when you paid by card

If something you paid for by card never arrives, is faulty or was not as described, two routes may help: Section 75 for credit cards and chargeback for debit cards. This guide explains how each works.

Two different protections

Paying by card can give you a second way to get money back, besides going to the seller. There are two routes. They work differently, and which one applies depends on how you paid and how much the item cost.

Section 75 is part of the Consumer Credit Act 1974. It is a legal rule. Under it, your card provider or lender can be held responsible, alongside the seller, if the seller breaks the contract or misleads you.

Chargeback is a different thing. It is a way of asking your card provider to challenge a payment and try to reclaim it through the card network. It is not a legal right, and the card provider does not have to raise one.

How Section 75 works

• The limits apply to each item, not to the whole order.
• The cash price of the item is what counts, not the amount you put on the card. Paying only a deposit or part of the cost by credit card can still be covered.
• It covers credit cards, point-of-sale loans and some catalogue accounts.
• It does not cover debit cards, charge cards, overdrafts, cash or bank transfers.
• Citizens Advice says it usually does not apply if you bought through a third party, such as a marketplace, a voucher site, a PayPal wallet or a travel agent.
• For items above £30,000, the Financial Ombudsman Service says a lender might still be responsible under a related rule (Section 75A).

Section 75 can apply when the seller has breached the contract, for example by not delivering, or has misrepresented what you were buying. You can claim from only one card provider for the same purchase. If you have a joint credit card, Citizens Advice says the main cardholder should make the contact.

How chargeback works

Chargeback can be used for debit and credit card payments. It is often used where Section 75 does not apply, such as a debit card purchase, or a credit card purchase of £100 or less. Your provider may call it a disputed transaction.

The Financial Ombudsman Service lists valid reasons as goods not matching the description, goods or services never arriving, goods being defective, a promised refund never being paid, or a cancellation under the seller's policy with no refund. Visa, Mastercard and American Express have different rules, so the details depend on your card.

You may be asked to show that you tried to sort the problem out with the seller first. A seller can sometimes challenge a refund after it has been made.

The usual steps

• Contact your card provider and say whether you want it to consider a Section 75 claim, a chargeback, or both. Putting this in writing is one option.
• Gather evidence, such as receipts, contracts, terms, adverts, messages, photos or videos.
• Reply quickly if the provider asks for more information, because time limits can matter.
• If you are unhappy with the answer, you can make a formal complaint to the provider.

If the answer is no

The Financial Ombudsman Service says you must first complain to the company. If you have no final response within eight weeks, or you are unhappy with the response, you can take the complaint to the Ombudsman. Where it upholds a complaint, it may direct a refund, repair or replacement, or compensation.

Citizens Advice notes that if a chargeback fails after your provider has challenged the seller's bank and lost, there may be nothing more you can do. If the provider will not try at all, you can complain.

If you are struggling to repay a credit card, free help is available from MoneyHelper, Citizens Advice and StepChange.

Check before you act

Rules, limits and card scheme time limits can change, and your own card terms matter. It can be worth confirming the details on the official pages linked below, or asking your card provider.

Sources

• Financial Ombudsman Service, Problems with goods and services: section 75 and chargeback
• Citizens Advice, Getting your money back if you paid by card or PayPal