Credit card refunds and section 75 Consumer Credit Act 1974

Posted by Amy Flower in Personal Finance on 6 January 2016 - Amy is a Senior Credit Analyst at checkmyfile

Many of us would have purchased our Christmas presents for our nearest and dearest using our credit cards. Any transactions over £100 are protected under section 75 Consumer Credit Act 1974 (CCA) if the goods received are not as described or faulty, for example, giving consumers a little protection. There is a peace of mind using a credit card knowing that there is protection for the consumer and a refund can be issued by your credit card provider if necessary.

What is not so well known is the loophole that allows your card provider to reverse their decision to refund a payment back to your card. “How?!” I hear you ask.

The law under section 75 CCA means your credit card provider is jointly and severally liable for any breach of contract or misrepresentation by the company. This makes your card provider as responsible as the retailer or trader for the goods or services purchased. Thousands of transactions that are refunded by credit card providers are not claimed back against the retailer, typically because it may be considered to be more work than necessary.

When a refund decision made by a card provider is reversed this is because the original retailer or supplier has defended the action with the card provider. This can result in the customer being given a refund by their credit card provider, who then reverses the transaction and makes the debit on the card again.

There are no time limits set out by law in which your card provider has to investigate and resolve your claim, which can see some claims lasting months and possibly years, depending on the complexity of the dispute. Whilst there is no law to govern credit card providers, they do have to adhere to their trading license registered with the Financial Conduct Authority (FCA), who will ensure that they are meeting their license requirements.

If you are unfortunate enough to be having a dispute with your credit card provider about the time taken to resolve your dispute for a transaction you may be able to apply a little pressure on them by making a complaint to them. They will then have 8 weeks to reply to your complaint in writing, failure to do so may lead you to raise your complaint with the Financial Ombudsman Service.

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