Section 75 Credit Card

GillyFlower

I had never heard of this before until a few weeks ago I saw Martin Lewis on a TV program but only caught the last part.

So I am about to -

1. Pay a deposit for a self catering holiday in this country. Have dealt with the same company last year and used my Credit Card as I thought it would offer me some protection. (Will amount to approx £1,500 the we have to pay a extra £1,000 precautionery deposit for any damage.)

2. We are considering having a Garden Room manufactured, it will be in the region of £15,000, and they will require a deposit and will charge for a Credit Card Payment. The full balance being paid when the manufacture of it is complete but we will be erecting it ourselves as a DIY 'kit'.

So -

Question 1

On both these transactions am I correct in understanding that I could pay a minimum amount to save Credit Card charges and I would still be protected under Section 75?

Question 2

Are there certain goods/services that Section 75 would not apply to e.g. our garden room. In this case we are not having the whole process carried out by the company.

eddddy

Hi GillyFlower

More in relation to question 2 - Section 75 offers additional protection against breach of contract by the supplier.

So let's say you order a garden room kit and pay £15k up front (part or all on CC). If the firm goes bust and does not deliver it, you have a pretty watertight case for the CC company refunding the £15k under s75.

Alternatively, assume the firm delivers the garden room kit, but it is flimsy and poorly finished. You still have to prove breach of contract (e.g. not as described, not fit for purpose) for an s75 claim. I suspect the CC company would expect you to provide expert reports and lots of other evidence before paying out £15k.

I guess you can look at it this way... if a breach of contract occurs you have the choice of two companies to chase - the supplier and the CC company. You could chase both, and see who gives in first. But it won't necessarily be the CC company.

The fact that they are supplying a DIY kit isn't really relevant - it's whether they breach the contract. (So check the t&cs, warranties and other contract documentation carefully. If there are nasty clauses like 'we reserve the right to delay delivery by up to 18 months', s75 won't override that clause in any way.)

thenudeone

1) yes. That is correct

2) as above - you will still have to prove misrepresentation or breach of contract.
s75 doesn't give you any extra rights at all. All that s75 says is that you can choose to go after the card company as well as or instead of the merchant, to enforce your existing contract or statutory rights.

Card companies might be less interested in fighting the case that the retailer would, especially if they can simply pass the cost back through the system to the original retailer through the charge-back system.

GillyFlower

Thank you for your advice.

Question 1 - I will pay some of my deposit on Credit Card to reduce extra costs. As it seems I will still be protected for the whole amount should the company 'go down'.

Question 2 - I will check the T & C's and again it seems that I may as well keep additional costs down by only paying the minimum on Credit Card for the deposit. We have been to the factory to see the process and each order is manufactured individually. So hopefully all will be well. Again it is in case the company 'goes down' I felt the Credit Card could be the best move but always thought I had to pay whole amount.

grumbler

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