Chargeback versus Section 75 usage

Legal position:

Section 75 of the Consumer Credit Act 1974 provides a statutory right for consumers in England and Wales who make purchases using a credit card (or certain other credit facilities) where the cash price of the item is over £100 and not more than £30,000. Under this provision, the credit card provider is jointly and severally liable with the supplier for any breach of contract or misrepresentation by the supplier. This means you can claim directly from your card issuer for issues such as faulty goods, non-delivery, or the supplier going out of business. It applies specifically to credit agreements and does not have a strict time limit for claims, though general limitation periods under the Limitation Act 1980 (typically six years) may apply depending on the circumstances.

Chargeback, by contrast, is not a legal right but a voluntary scheme operated by card networks such as Visa, Mastercard, and American Express. It allows you to dispute a transaction with your card issuer (for both debit and credit cards) and potentially reverse the payment for reasons including non-delivery of goods or services, incorrect amounts charged, or unauthorised transactions. There are no specific value limits, and it can apply to a broader range of issues, but success depends on the issuer's discretion and the scheme rules. Chargeback claims typically must be made within 120 days of the transaction or expected delivery date, though this can vary by issuer.

When to prefer Section 75:

You should prioritise Section 75 where it applies, as it offers stronger legal protection and joint liability, making it more reliable for recovery. For example, use it first if you paid with a credit card for an eligible purchase and the supplier has failed to resolve the issue (such as providing a refund for defective goods). It is particularly useful when the supplier is unresponsive or insolvent, as the card issuer must step in. However, it only covers credit card transactions meeting the value thresholds and requires a direct link between the credit provider and the supplier.

When to use chargeback instead:

Opt for chargeback in situations where Section 75 does not apply or as an alternative if a Section 75 claim is unsuccessful. This includes:
1. Purchases made with a debit card, as Section 75 does not cover these.
2. Transactions below £100 or above £30,000.
3. Issues not strictly involving breach of contract or misrepresentation, such as billing errors or unauthorised charges.
4. Overseas purchases where the card scheme rules might provide quicker resolution.

Chargeback can also be a faster initial step, as it often involves less formal evidence than a Section 75 claim. Note that if you pursue chargeback first and it fails, you may still be able to fall back on Section 75 if eligible, but always check your card issuer's policy to avoid any procedural bars.

Practical next steps:

Before using either option, attempt to resolve the dispute directly with the supplier, as this is often the simplest and quickest approach. Gather evidence such as receipts, correspondence, and details of the issue.

If that fails:
1. Contact your card issuer promptly to explain the problem and specify whether you are claiming under Section 75 or chargeback.
2. Provide supporting documentation, including proof of purchase and any communications with the supplier.
3. If the issuer rejects your claim, you can escalate to the Financial Ombudsman Service for free independent review, provided you act within their time limits (usually six months from the issuer's final response).

The best choice depends on the specifics of your transaction, such as the payment method, purchase value, and nature of the dispute. If you provide more details, I can offer more tailored guidance. If your query relates to a jurisdiction outside England and Wales, please note that this assistant focuses on that area; you may wish to consult our worldwide lawyer, Atlas, for other regions.