Section 75/Chargeback question

Civvy21

Good afternoon,

Grateful for some advice re Section 75 and debit card chargeback.

A friend of mine is about to purchase a caravan which is going to cost approximate £35,000. He has already paid a deposit of £1,000 by credit card. Am I right in thinking that he will get no cover whatsoever under section 75 because the product is over £30,000. He will not just get cover up to £30,000?

He is hoping to pay the final balance by debit card. Is there an upper limit on chargeback? Also, if he has to pay the final balance using two debit cards would he still get Chargeback cover on the full cost of the Caravan. Would it matter if the cards were from different banks but still Visa (or alternatively both Mastercard).

Grateful for any advice. 

DullGreyGuy

Correct, no cover if its over £30k... you dont get the £30k and lose out on anything above. You can get Section 75A cover if they were to get tied finance up to £60,260 but that would only apply if the vendor offers finance.

There is no financial limit with chargebacks, you can only chargeback what you've paid though so if deposit and 2 payments are spread across 3 cards that would be three chargebacks they'd need to do. 

born_again

There would be chargeback rights on CC & Debit card(s) so long as they meet the criteria for them. Would just be for the amount on each card. Also in reality it would only be 120 days from purchase. So would not cover anything found after that timescale.

Civvy21

Thanks. That is most helpful.

So his best bet is to pay the balance with a debit card(s). 120 days of chargeback cover is better than nothing. Especially as caravans are often riddled with faults on delivery.

Thank you once again.

Civvy21

Sorry. Just thought of one more question.

If my friend paid part of the final balance using a debit card and his wife paid the remainder of the final balance using a different debit card, would his wife be covered by chargeback even though the caravan will be in his name only? Hope that makes sense. 

Thanks. 

born_again

Civvy21 said:

Sorry. Just thought of one more question.

If my friend paid part of the final balance using a debit card and his wife paid the remainder of the final balance using a different debit card, would his wife be covered by chargeback even though the caravan will be in his name only? Hope that makes sense. 

Thanks. 

Yes.
Unlike S75, chargeback does not rely on that ownership etc.

km1500

Is there any way he can get the caravan to below 30k eg buy a lower spec and in a few months time pay the extra 5k to upgrade it. Don't know much about caravans so maybe it's a non-starter

Civvy21

Born_again: Thank you. That is useful to know.

Km1500: Thanks. It doesn't really work like that. He could of got a more basic model but he wanted a higher spec van. Unfortunately the cost of caravans have rocketed since Covid. 

Civvy21

Just another thought. Is there a "safer" way of paying for items that are in excess of £30k? Or are debit cards with a chargeback facility the safest option? I understand Section 75a covers linked finance but obviously doesn't help if you have arranged finance elsewhere.

In an ideal world the upper Section 75 limit of £30k should be increased. I'm sure the banks are happy for it to stay as it is but hopefully at some stage it should change. Has anybody heard of any moves to do so?

Thanks.

powerful_Rogue

Civvy21 said:

Just another thought. Is there a "safer" way of paying for items that are in excess of £30k? Or are debit cards with a chargeback facility the safest option? I understand Section 75a covers linked finance but obviously doesn't help if you have arranged finance elsewhere.

In an ideal world the upper Section 75 limit of £30k should be increased. I'm sure the banks are happy for it not to stay as it is but hopefully at some stage it should change. Has anybody heard of any moves to do so?

Thanks.

It was increased back in 1983. I think £30k is an adequate amount and there are no plans to alter it.

You can of course write to your MP and see what they say.

eskbanker

Civvy21 said:

In an ideal world the upper Section 75 limit of £30k should be increased. I'm sure the banks are happy for it not to stay as it is but hopefully at some stage it should change. Has anybody heard of any moves to do so?

I suspect that if there were to be any changes to section 75, they'd be more radical reforms, probably to the consumer's disadvantage - it stems from a bygone era when it was designed to protect occasional high-value purchases funded by hire purchase and other one-off credit agreements.  At that time, there was no concept of vast quantities of payments being made routinely with credit cards, so it's already far more widely applicable than envisaged, so at some stage it'll probably be abandoned in its current form....