When a card purchase goes wrong, the way you paid decides the route back

The first step when something you bought goes wrong is always the seller. Under consumer law, goods must be as described, of satisfactory quality and fit for purpose, and services must be carried out with reasonable care and skill. Most problems end there, with a repair, a replacement or a refund. The card routes matter when they do not: when the seller refuses, stops replying or goes out of business.

Two mechanisms exist, and they are often mentioned in the same breath. One is a legal right written into an Act of Parliament. The other is a set of rules run by the card networks. Knowing which applies to your purchase saves a lot of back and forth with the bank.

Section 75: the credit card provider shares responsibility

Section 75 of the Consumer Credit Act 1974 says that if you buy something using certain kinds of credit and you have a claim against the supplier for misrepresentation or breach of contract, you have a “like claim” against the lender. The lender and the supplier are, in the Act’s words, jointly and severally liable. In practice, that means you can pursue your credit card provider for the same thing you could have claimed from the seller.

The Financial Ombudsman Service sets out when it applies. You must have paid some or all of the cost by credit card, with a point-of-sale loan or with certain catalogue shopping accounts, and the cash price of the goods or services must be more than £100 and not more than £30,000.

Two details are easy to miss.

• It is the cash price that counts, not what went on the card. The Ombudsman says Section 75 applies even if you made only part of the payment with credit. A deposit on a credit card can bring the whole purchase within reach.
• It is per item, not per basket. The Act refers to a single item with a cash price within the limits. Several cheaper items bought together do not add up to a qualifying item.

When Section 75 does not apply

According to the Ombudsman, Section 75 does not apply if you paid with a debit card or a charge card, if the credit came from an overdraft or a general-purpose bank loan, or if you paid by cash, credit card cheque or bank transfer. It also depends on a direct chain between you, the lender and the supplier, which the law calls a debtor-creditor-supplier agreement. Paying through an intermediary can break that chain, so it is worth checking how a payment was processed before relying on Section 75.

For a purchase above £30,000 the Ombudsman notes that a lender may still be responsible under a separate provision, Section 75A, which covers certain linked credit agreements.

Chargeback: a card-scheme rule, not a law

Chargeback lets your bank challenge a card payment and claw it back from the seller’s bank through the card scheme. It is available on debit cards as well as credit cards, and there is no £100 minimum. The rules belong to the card schemes themselves, such as Visa, Mastercard and American Express, and each has its own.

The Ombudsman lists typical valid reasons: goods or services that do not match the description, goods that never turned up, items that arrived broken or defective, a refund that was promised but never arrived, and a cancellation in line with the seller’s policy where no refund followed. A bank does not have to raise a chargeback, but where there are valid reasons it can be good practice to do so.

The time limit is the part to watch. The Ombudsman says you usually have around 120 days to raise a chargeback, often counted from when you expected the goods or discovered the fault, and that limits can be longer or shorter depending on the circumstances.

General summary only. Each claim depends on its facts, the card scheme rules and how the payment was made.

Doing the sums

An illustrative case. Sam and Priya order a £1,200 sofa, paying a £200 deposit on a credit card and the rest by bank transfer. The retailer closes before delivery. Because the cash price of the single item is between £100 and £30,000 and part was paid by credit card, Section 75 can be used for the full £1,200, not just the £200 deposit. Had they paid the deposit by debit card instead, a chargeback could only seek back the £200 paid on the card.

Making a claim, step by step

1. Contact the seller first and keep a record. Card scheme rules often expect you to have tried to resolve the problem with the seller.
2. Gather the evidence: the order confirmation, receipts, photos of damage, delivery records and messages with the seller.
3. Contact your card provider, explain what went wrong and ask it to consider a chargeback, a Section 75 claim or both. The Ombudsman says it can be good practice for a bank to explore chargeback even when Section 75 also applies.
4. Reply promptly if the bank asks for more information, because chargeback deadlines keep running.
5. If you are unhappy with the answer, make a formal complaint to the card provider. If it does not send a final response within eight weeks, or you disagree with it, you can take the complaint to the Financial Ombudsman Service, which is free.

Who this matters for, and what to check

These routes are worth knowing about before you pay, not just afterwards. They matter most for larger, one-off purchases where the seller is a company you do not know well: furniture, kitchens, building work, appliances, tickets and travel. For package holidays, other protection such as ATOL may also apply, and the Ombudsman points to the Civil Aviation Authority for those cases.

Before paying a large deposit, it helps to ask three questions. Is the item a single purchase with a cash price over £100? Can at least part of it go on a credit card that you can clear in full? Will the payment go directly to the seller, or through a third party that could break the chain? Paying a credit card balance in full each month keeps the protection without the cost of interest, and on-time repayments are what lenders later see on your credit file.

A Direct Debit taken in error is a different matter, covered by its own scheme; we explain it in what the Direct Debit Guarantee covers.

The short version

Section 75 makes a credit card provider jointly responsible with the seller for a single item costing more than £100 and up to £30,000, even if only part was paid on the card. Chargeback works on debit and credit cards under card-scheme rules, usually within about 120 days, and recovers only what was paid by card. Start with the seller, keep the paperwork, ask your card provider about both routes, and remember that the Financial Ombudsman Service is there, free of charge, if the answer seems wrong.