Know your rights under Section 75
Last year, we posted a few pieces on section 75 and the visa debit chargeback scheme. In recent months, as the economy has continued to sputter and more retailers are going under, an increasing number of consumers are asking for refunds for money spent on goods or services that were either faulty or not delivered.
However, card providers are increasingly trying to get out of having to pay these claims. According to legal experts at the Financial Ombudsman Service, one of the main ways they do this (intentionally or not) is by frustrating the consumer into giving up on seeking compensation. This includes asking consumers to respond to an overwhelming number of letters from credit providers. Is this an deliberate effort to avoid paying claims? That has not definitively been determined. Nevertheless, many consumers simply give up when they realise the paperwork involved.
It's always a good idea to know what your rights are and what to do if the bank starts f***ing with you. So here are 5 selected recaps of Section 75 and how it may apply to you:
1. A House of Lords ruling in 2007 makes it possible to make claims for goods or services bought abroad, whether while on holiday or over the Internet.
2. Debit cards, store cards, and charge cards aren't covered except for Visa debit with its chargeback procedure. This covers all Visa debit cards, Visa credit cards, prepaid Visa cards and Visa Electron purchases for items that are faulty or not received.
3. Payments made by PayPal and other online payment systems are covered by chargeback. There is a 120 day time limit on chargeback claims starting the day you learn of a problem, or from the day the service was to have been delivered.
4. Claiming compensation under Section 75 or chargeback requires proof of breach of contract such as receipts for goods or services not received.
5. Card issuers have eight weeks in which to respond to a consumer's claim. If they don't, put your case to the Financial Ombudsman Service by contacting them at 0845 0801800 or visiting financial-ombudsman.org.uk. Other options when claims are rejected include contacting Citizens Advice, Consumer Direct, or Which? Legal Service.
In cases where a seller failed to provide goods owed, you have six years (five in Scotland) from the date of breach of contract to make a claim. If a card issuer rejects your claim, you have six months in which to complain to the FOS or the other parties mentioned above. Often, the threat or initiation of action in small claims court will get the attention of a card issuer. Faced with court costs (even if they win) they will see a Section 75 case in a more favourable light.
If you've ever used section 75 favourably or unfavourably, what is your personal experience? Do you think it makes a big difference to the amount of protection you receive when purchasing goods?