Debt Solicitors

by Pinar Coktas

Every time you purchase goods and services using your credit card you are creating yourself a right to claim against your credit card company when things go wrong. This may sound too good to be true but section 75 of the Consumer Credit Act 1974 (CCA ‘74) states that we can choose to pursue the supplier or the credit card company or both.

Why? - We are positively encouraged to consider it normal to buy things now and pay for them later. Regulation in this area prevents unscrupulous traders taking advantage of vulnerable consumers and credit card companies are made equally liable for the protection of our interests. We have of course consumer friendly EU to thank for.

How is the credit card company liable under section 75 CCA ‘74?

The credit card [finance] company shall be jointly and severally liable with the supplier (trader) for any breach of contract or misrepresentation if:

? It is a regulated agreement;
? The cash price of any single item exceeds £100 and is not more than £30,000.

So if you think your chicken sandwich from Tesco is below ‘satisfactory quality’ and you would like a refund, you are in practice relying on the Sale of Goods Act 1979.

The New Consumer Credit Act 2006 further extends the above threshold and where the goods are at least £30,000 and less than £60,260, you can pursue the credit card company but only where you have tried to obtain satisfaction from the supplier first.

Other points to note:

• It applies even if only part of the price was paid using credit.

• s.75 still applies even if you exceeded your credit limit.

• There is no limit on the amount of damages that can be claimed, which could be higher than the threshold figure where there is also a claim for consequential loss.

• Authorised card users, such as a spouse, are not the debtor and so do not automatically receive the protection of s.75. So if your partner is a second user on your card get him/her to buy goods and services using their own card.

• If you use your credit card to withdraw cash for a particular purchase, you will not be covered by section 75 as the link between the credit card company and the retailer is broken.
In practice:

1) Use your credit card when purchasing goods and services,
2) Use your own credit card,
3) Send your letter before action to both your supplier and your credit card company at the same time,
4) Hold your nerve when negotiating with Visa’s legal team as the law is clearly on your side.