MARTIN Lewis has warned shoppers about a 1p rule that could avoid leaving shoppers out of pocket.
With Christmas only days away, festive shoppers are out in their droves to get any last-minute gifts in.
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But many aren’t aware of a valuable piece of consumer protection which helps shoppers get their money back in the event that their items aren’t delivered or didn’t come as expected.
Martin Lewis warned this week that any shopper spending £100 or more should ensure that they use their credit card at the till.
In his latest MoneySavingExpert newsletter, the consumer champion said: “For powerful protective voodoo on bigger items, pay at least 1p on a credit card.
“Buy something costing £100.01 to £30,000 and pay for any of it, even a penny, on a credit card, and the card firm is jointly liable with the retailer for the whole amount.”
This trick helps shoppers ensure that they’re covered by Section 75 protection.
If the retailer goes bust, or if your items don’t turn up, or if they didn’t arrive as expected Section 75 protection ensures that you’re entitled to a full refund in most cases.
The legal protection is only offered on purchases costing between £100 and £30,000.
But, Martin Lewis has revealed a trick to ensure you’re covered even if you don’t wish to spend hundreds on your credit card.
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The MoneySavingExpert said that as long as the purchase costs £100 or more and you paid for just a penny of it on your credit card – you’ll be protected.
He said: “Put at least some of it on a credit card. Then if the retailer goes bust, won’t play fair with faulty items, or you buy abroad and can’t take the item back, you can go to the card firm.”
We’ve explained how Section 75 protection works in detail below and how you can make a claim.
What is Section 75?
Section 75 of the Consumer Credit Act is one of the most important bits of consumer legislation in the UK.
It means that if you pay for a big purchase on your credit card and something happens – like the goods aren’t delivered or the shop goes bust – your card provider is just as responsible as the retailer to refund you.
There are a few caveats to the legal protection – the purchase you are making must cost between £100 and £30,000 and it’s important to remember that it only applies to credit cards – but it has helped countless Brits get their money back after they’ve been let down.
What is covered by Section 75?
The protection applies to most credit agreements, so as well as credit cards, it applies to store cards and store instalment credit deals too.
So if the retailer you’re buying from goes bust or your goods aren’t delivered or the items are faulty, you have the legal right to go to your card provider to get your cash back.
You’re even protected if you haven’t paid for the item fully – say you’ve paid a deposit you’ll still be covered, as long as the total cost of the item is more than £100.
Section 75 also applies to goods bought online, over the phone or by mail order which are delivered to the UK from abroad too.
Remember that you aren’t covered by Section 75 if you pay for items with your debit card.
What isn’t covered by Section 75?
While Section 75 offers great protection for consumers, there are a few things you need to be aware of.
You may not be able to claim under Section 75 in circumstances when you’ve paid for goods through an agent or a third party.
For example, if you buy concert tickets direct from the venue with your credit card, then Section 75 may apply but if you bought them via a ticketing agency then it may not.
This is because the card provider could argue that as the payment wasn’t paid directly to the supplier of the goods or service, it doesn’t apply, as it doesn’t have a “direct relationship” with them.
Another grey area is when you pay with your credit card through services like PayPal.
If the company you are buying from has something called a “Commercial Entity Agreement” with Paypal then you may still be able to make a claim.
Paypal also has its own refund system, so consumers should use that in the first instance.
Although Section 75 doesn’t cover debit cards or payments under £100, there is another refund scheme which can help called Chargeback.
This however isn’t a legal right, so if you’re making a big purchase it’s always best to use your credit card to make sure you’re covered.
How can I make a Section 75 claim?
To make a claim, contact your credit card provider – your first port of call should be its customer services phone number – and tell them you want to make a claim under Section 75.
It should then send you a claim form which you can fill in and then your provider will use to process your application.
Your card firm might ask you to provide evidence such as a receipt or a report verifying that the item is faulty.
In cases where the retailer hasn’t gone bust, you should complain to them first but if they aren’t treating your care with the proper attention, you should contact your card provider.
What should I do if my claim is rejected?
If you find that your card company has been unhelpful and refused your claim – even though you have a legal right to a refund – you should take your case to the Financial Ombudsman Service (FOS).
You should ask your card provider for something called a “letter of deadlock” if you haven’t already received one so that you can take it to the FOS, who will decide if you have been treated fairly or not – and if you should be refunded.
If more than eight weeks have passed since you submitted your claim to your card company, you can go to the FOS without needing to bother with a letter of deadlock.
