Built in Safeguards within Your Credit Card

With most of us owning at least one credit card, and many of us owning more than one along with a number of store cards, the amount of goods purchased by credit cards in the UK is increasing. Whether or not you pay by credit card or cash, in most cases, the transaction goes through without a hitch, but occasionally, things don’t go according to plan and you end up buying faulty or damaged goods, and in some cases (like mail order) goods you never ordered at all.

If you paid by cash for goods that were either faulty or damaged in some way, or goods you never ordered, then under the Sale of Goods Act you have rights to a refund, repair or replacement. This also applies to any service provided, for example, home repairs that are not up to standard. If you were unfortunate enough to have this happen to you, then your course of action would be to contact the retailer you bought the item from, or the trader you contracted to do the work to get it sorted out. If you cannot get a result to your satisfaction, you can take legal action via the small claims court so as to make them resolve the problem.

If however, you paid with a credit card for goods that were either faulty or damaged in some way, or goods you never ordered, then there is another course of action you can take. Under Section 75 of the Consumer Credit Act, the credit card company is ‘jointly liable’. This means it is equally responsible along with the retailer or trader for the goods or service. Therefore, if the retailer or trader will not sort out your problem in a satisfactory manner, rather than you having the hassle of trying to reach a settlement with the retailer or trader, you can contact the card company to sort out your problem. This of course is very useful when dealing with a retailer or trader who doesnt answer your phone calls or reply to your letters, or in the extreme case, where the retailer or trader has stopped trading.

Types of transactions covered in Section 75 of the Consumer Credit Act

Not all transactions paid for by credit card are covered under Section 75 of the Consumer Credit Act. The goods or services you have bought with your credit card must have cost between £100 and £30,000, and only in those transactions is the credit card company liable. It is important to note that Section 75 of the Consumer Credit Act only applies to credit cards and not to debit cards or charge cards.

Transactions that are not covered by Section 75 of the Consumer Act

There are some transactions that do not fall under the cover of Section 75 of the Consumer Credit Act, these are usually some of the more intricated dealings, where although you paid with you credit card, the company that processed your transaction was not the same company that provided you with the goods or services.

A good example of this is when you buy things on the Internet, the seller may stipulate that you must use PayPal (or a similar type of service). PayPal withdraws the money from your credit card and sends the same amount to the seller. Because the credit card was not used directly to purchase the goods or services, if there is a problem with the goods or service provided by the seller, the card company isn’t jointly liable.

Contacting your credit card company in writing

If you experience the unfortunate situtaion where you have bought faulty or damaged goods with a credit card, you can, if you want to, look for satisfaction from the credit card provider instead of the retailer. There are a number of reasons you may want to do this, perhaps the retailer has refused to help or does not answer your letters, they may even have gone bust.

In the letter you write to the credit card provider, make sure that you include the date and all details of the transaction, what your problem is and how you want it resolved.

The credit card provider has not got any idea of the product or service you have purchased with your credit card, so you will have to write down all the relevent details regarding the transaction. Tell them what measures you have already taken, and any contact you have already had with the retailer regarding your problem.Give the credit card provider a reasonable time to respond, for example, two to three weeks. If you do not hear anything from the credit card provider after the three weeks have transpired, then it is time to take the matter further, you should threaten them with court action, normally by quoting section 75 of the Consumer Credit Act. If you still do not get any joy out of the credit card provider regarding resolving the matter, then you can start court proceedings providing the amount of money involved is under a certain amount (£5,000 in England and Wales, £2,000 in Northern Ireland, or £750 in Scotland), you can take the matter to the small claims court.


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