Credit Cards: Additional Protection For Consumers

Use of credit cards are, for many people, a part of every-day life. When used responsibly, credit cards are an effective way to increase your credit rating and manage your cash-flow.

What is more, they provide strong additional protection for consumers. When the product or service you purchased on your credit card goes wrong, or you have a dispute with your supplier, it can be the difference between being left out of pocket and having things set right.

What is the additional consumer protection?

If your supplier fails to deliver what they promised (e.g. if the goods/services are defective, or did not match the description), the supplier has likely breached their contract with you. In those circumstances, you would usually be able to make a claim against the supplier to claim a refund, or the cost of fixing the defect.

Under s.75 of the Consumer Protection Act 1987 your credit card company will also be liable, together with the supplier, for any breaches of contract or mis-representations made by the supplier.

Why is it so useful?

Your right to pursue your credit company is in addition to your usual rights to claim for a breach of contract against the supplier.

This is particularly useful if (i) you cannot trace the supplier, (ii) your supplier may be insolvent, (iii) the supplier is not co-operating with you on your requests for a refund or compensation, or (iv) the supplier is based in a foreign country.

It ensures that you are able to pursue your claim against a more reliable/reputable company, that is more likely to pay out, if your claim is valid.

When do they apply?

Your protection under s.75 of the Consumer Credit Act will apply provided that:

• The purchase is made by you as a consumer, rather than in the course of your profession or business.
  

• The purchase is made on a credit card (rather than a debit card).
  

• The value of the purchase is between £100 and £20,000:

It is the value of the good/service that is key, rather than the amount paid by card. E.g. if you pay a builder to complete works on your kitchen for £10,000, and you pay £1,000 by credit card, you could still be covered for the whole £10,000.

It is the value of each individual purchase that is relevant. E.g. if you are paying for two items costing £60 each from the same supplier, the purchase unfortunately not receive protection.

• Your contract should be directly with your supplier. If you have used an agent or an intermediary, your credit card company may try to avoid liability for that reason.

How we can help

We provide professional and accessible legal advice to consumers and members of the public on claims against suppliers. Where a purchase has been made on a credit card, we can also advise on claims against the credit card company. If you are concerned with the quality of a product or service that you received, or if what you received does not match what was advertised or ordered, we can help.

We offer a free no-obligation consultation to discuss new enquiries. That means you can discuss any problems you have, and consider your options without the worry of high legal costs.