Getting Started With Chargebacks and Section 75 Claims

When a card purchase goes wrong, chargeback and Section 75 are the two main routes for asking your card provider for money back. Here is what each one covers, and how to tell which applies to you.

Summary

• Chargeback is a dispute process run through the card schemes, and it is not a legal right, so your bank chooses whether to raise one.
• Section 75 of the Consumer Credit Act 1974 makes your credit card provider jointly liable with the trader for purchases over £100 up to £30,000 per item.
• Always contact the trader first, because most claims require you to have tried to sort the problem out directly.
• Section 75 limits apply to a single item rather than the whole order, so a large order of small items can fall outside it.
• If your card provider or the trader says no, you can take the complaint to the Financial Ombudsman Service for free.

When a card purchase goes wrong, you have routes to ask for your money back that other payment methods do not offer. In the UK, the two main ones are chargeback and Section 75 claims. This guide explains what each one covers, how they differ, and how to get a claim started.

When Something Goes Wrong With a Card Purchase

Purchases fail in familiar ways. An item never arrives. A service is cancelled and the refund never appears. A retailer charges the wrong amount, or takes the same payment twice. Sometimes a firm stops trading before it delivers what you paid for.

The Financial Ombudsman Service, the free body that resolves disputes between consumers and financial firms, says complaints of this kind often involve event and travel tickets, beauty treatments, household appliances, fitted kitchens and training courses. If you suspect the seller itself was never genuine, our article on the real cost of online purchase scams explains what those schemes look like.

Whatever the purchase, start with the trader. Contact them and follow their complaints procedure if they have one. Card claims generally work best, and sometimes only work, once you have tried this. If the trader ignores you or has disappeared, chargeback and Section 75 are the fallback.

What a Chargeback Is and When You Can Ask for One

A chargeback lets you challenge a card payment and ask for the money to be clawed back from the trader. It runs through the card schemes, the networks behind the cards. In the UK these are mainly Visa, Mastercard and American Express, and each sets its own chargeback rules, so the details depend on your card and provider.

Common reasons for raising one include:

• goods that never arrived, or a service that was never provided
• a trader cancelling a purchase without refunding you
• being charged the wrong amount, or charged twice by mistake
• a merchant cancelling the order altogether

Chargeback is not a legal right. Your bank or lender does not have to raise one, although the ombudsman treats doing so as good practice where valid reasons exist. It also has limits: it will not cover the cost of repairing a faulty item, because the claim attaches to the original payment rather than later expenses. You also cannot start a claim until you have contacted the seller.

How Section 75 Works on Credit Card Purchases

Section 75 comes from the Consumer Credit Act 1974. It makes your credit card provider just as responsible for a purchase as the trader who sold it, through what is called joint and several liability: a claim against the supplier for misrepresentation or breach of contract is also a claim against the card provider.

Section 75 applies when a single item cost more than £100 and no more than £30,000. The threshold is per item, not per order. An order totalling £105 of small items can fall outside Section 75 if no single item cost more than £100, even though the total clears the bar. Chargeback is then the route left open.

A few further points matter:

• The protection usually applies only when you bought directly from the trader, so purchases through third-party marketplaces often fall outside it.
• If you paid by more than one method, paying any part of the cost by credit card can still bring the purchase within Section 75.
• Section 75 can also apply to some buy now, pay later credit, because that is a form of borrowing. Our guide to buy now, pay later under the new rules covers how that type of credit works.

When a Section 75 claim succeeds, the card provider may arrange a repair, a replacement, or a full or partial refund.

Debit Card or Credit Card: How Your Protection Differs

The route open to you depends mainly on how you paid.

In practice, a credit card gives you two possible routes where the amounts qualify, while a debit card gives you one. If you paid through PayPal or a buy now, pay later provider rather than directly by card, start by opening a dispute on that provider’s own site. PayPal, for example, allows 180 days from the date of payment.

How to Make a Claim, Step by Step

1. Contact the trader and follow its complaints procedure. Keep a record of what you sent and when.
2. Work out which route applies. A credit card purchase over £100 per item suggests Section 75; anything else points to chargeback.
3. Contact your card provider. Their website usually lists the process under headings such as disputed transactions or chargeback claims.
4. Check the payment has cleared. Providers cannot dispute a pending transaction, and deposits for hotels and car rentals can take longer.
5. Send your evidence and wait for the provider’s decision.

Evidence, Time Limits and What to Expect

Before a chargeback can be raised, your provider will want evidence backing up your claim. Proof of purchase, any communication you had with the merchant, and details of the payment are the usual requirements.

Time limits for chargeback depend on your card provider, so ask early rather than assuming you have months to spare. Timing can be more forgiving than it first appears. In one example published by a major bank, a customer claimed 90 days after a cancelled concert was due to take place and was still refunded, because the limit ran from the date the event was due rather than the date of purchase. Ask your provider how long you have for a Section 75 claim too, as the rules differ.

Once a claim is submitted, the provider reviews it. Some state a response window of around 7 to 10 working days. The outcome is either a chargeback raised with the card scheme, or a rejection if the claim is ineligible or the evidence is insufficient.

What to Do if the Card Provider or Trader Says No

If you are unhappy with how your card provider handled the claim, complain to them formally first. If they do not send a final response letter within eight weeks, or you disagree with their answer, you can take the complaint to the Financial Ombudsman Service, which is free. It looks at evidence from both sides, along with the relevant law, regulations and industry codes, and if it finds you were treated unfairly it will ask the business to put things right.

Two boundaries are worth knowing. A car bought under a car finance agreement, such as hire purchase or conditional sale, sits outside chargeback and Section 75 and follows different rules. For travel, the ATOL scheme may help where it applies, alongside or instead of a card claim. Chargeback is also not the answer to every scam: if you were tricked into sending money directly, rather than paying a trader by card, a different set of refund rules applies.

If you are dealing with a live problem now, one small first step is enough: write down the payment date, the amount, the card you used and what went wrong. That single note tells you which route applies and gives you the opening line of any claim.

Next steps

• Authorised Push Payment Scams: Warning Signs and Your Right to a Refund: why card claims do not cover transfers you were tricked into making, and what applies instead.
• The Real Cost of Online Purchase Scams: how fake online sellers operate, and what to check before you pay.
• Contactless Cards and Mobile Wallets: How Secure Are They?: how card security works at the point of payment, before a dispute ever arises.

Questions readers ask