Section 75 card protection: 5 things you need to watch out for

If you use a credit card, Section 75 can offer valuable protection if you find yourself in a dispute with a retailer or service provider. 

Section 75 makes your card provider and the retailer or service provider ‘jointly and severally’ liable for any breach of contract or misrepresentation – providing the item or service cost between £100 and £30,000.

This means that if there's an issue with something you’ve bought, and the retailer or service provider can’t or won’t make things right, you can claim a refund from your credit card company. But the legislation comes with some loopholes that could catch you out.

Here, we outline five of the most common traps based on the experiences of people who have requested a refund from their card provider, including those who have used our free Section 75 tool to do so - and how to dodge them.

1. The £100 threshold

For a claim to be valid, the item or service must cost more than £100 and less than £30,000. 

We heard from one Which? member who’d requested a refund from their credit card provider after buying two flexible flight tickets and discovering they were unable to change the date on one of them.

Their claim was rejected because although the total value of the transaction was £139.50, the cost of each individual ticket was less than £100. 

The application of Section 75 isn’t always straightforward if you’ve bought multiple items that were – or could have been – individually priced. But you are potentially protected for the total value of an item, even if you’ve used only your credit card for part of your payment.

If your credit card provider doesn’t accept your claim, there may be another safety net. Chargeback protection extends to debit and prepaid cards, and unlike Section 75, covers purchases of any value. But it’s not underpinned by legislation.

While you must submit your chargeback claim to your card provider within 120 days of making the purchase, there’s no time limit for Section 75 claims, beyond the statute of limitations (five years in Scotland and six in the rest of the UK).

• Find out more: what is Section 75 and how does it work?

2. Claims made by secondary cardholders

Section 75 won’t apply if a purchase is made by the secondary cardholder, and the primary cardholder doesn’t benefit from it.

One member told us he and his wife were caught out by this when she used their credit card to pay for a holiday, but the travel company stopped trading before the trip. 

When the member tried to launch a Section 75 claim, it was refused as he – the primary cardholder – wasn’t due to join his wife on the holiday. 

This means it’s a sensible idea for the primary cardholder to make any big purchases to ensure you’re eligible for Section 75.

• Find out more: the best and worst credit card providers

3. Purchases from third-party sellers

There has to be a direct link between the ‘debtor’ (customer), ‘creditor’ (credit card provider) and ‘supplier’ (the business supplying the goods or service) for Section 75 to apply.

This is broken if you buy something from third-party sellers or online marketplaces. For instance, if you buy flights through a travel agent and the airline goes out of business before you fly, you may not have a valid claim, as the payment for the flights was to an intermediary rather than the service provider itself.

Kate Hardcastle MBE, founder of business consultancy Insight With Passion, told Which? Section 75 ‘will not kick in if the sale is not direct between credit card and vendor - meaning that the reassurance blanket offered by Section 75 may have been muted accidentally in the way the consumer has [chosen] to purchase.’

In cases where the debtor-creditor-supplier chain is broken, you could try lodging a chargeback claim instead.

• Find out more: your shopping rights on online marketplaces

4. Purchases made via third-party payment processors

The terms ‘PayPal’ and ‘third-party payment’ appeared in around 100 claims submitted to the Which? Section 75 tool since June 2022. 

These include a claim made by Neil Palfreyman and his wife, Crissy, relating to a faulty CarPlay system.

They discovered the microphone was ‘defective’ and were advised to return the product by the company, which they did. But the company did not process a refund. The couple then submitted a Section 75 claim to their credit card provider, Barclaycard, but this was rejected because they’d paid via PayPal.

However, if you use your credit card to pay for something through PayPal – and the funds go directly to the seller – as long as the company you’re buying from has a Commercial Entity Agreement with PayPal, you may still be able to claim against your credit card company under Section 75.

PayPal has its own buyer protection scheme, which can reimburse you if you don’t receive an item, or it doesn’t match the seller’s description.

To benefit from the stronger protection of Section 75, though, pay directly via credit card wherever possible.

• Find out more: the latest PayPal email scams

5. Buy now, pay later purchases

Over a third of UK shoppers have used buy now, pay later (BNPL) services to spread the cost of purchases, according to credit reference agency Equifax.

While these services can offer a convenient way to borrow interest-free over the short term, they aren’t regulated, which means you have fewer consumer protections compared with more traditional credit products.

This might be set to change. BNPL could be regulated by the Financial Conduct Authority by the end of 2023, depending on the outcome of a government consultation, which closed in April 2023. This would also mean customers would be able to take complaints to the ombudsman.

• Find out more: 'buy now, pay later' schemes explained

Which? calls for credit card protections to be modernised

We would like to see Section 75 extended as soon as possible to cover purchases made through buy now, pay later services.

We’re urging the government to ensure Section 75 remains protected in legislation, and to look at making updates that will plug the gaps in protection affecting purchases made by secondary cardholders, as well as payments made via third parties.

The Financial Ombudsman Service has also called for the concept of the ‘debtor-creditor-supplier agreement’ to be clarified and updated, arguing that the development of new payment systems has made it progressively difficult for people to know whether a payment satisfies this requirement.

• Find out more: best and worst shops