Section 75...the answers

1.    Section 75 applies provided the consumer pays anything between £100 and £30,00 on their credit card

Answer False – the amount put on the card is irrelevant.  The price of 1 item of the goods is what is relevant.  If 4 airline tickets cost £70 each then £280 can be put on the card but it won’t be covered because the price of 1 airline ticket was below £100.  Conversely if a car cost £25000 and only £50 was put on the credit card then it would be covered.

2.    Section 75 applies provided the minimum value of the item purchased is £100 or over or is priced at no more than £30,000

Answer False – the value of the item purchased must be OVER £100.  Being exactly £100 won’t afford the customer Section 75 protection.

3.    Section 75 applies even if the consumer has paid off the amount they paid on their credit card.

Answer True

4.    Section 75 applies even if the consumer has exceeded their card limit by making the purchase.

Answer True

5.    A consumer can only look to their credit card provider for redress once you, the seller, have declined their request for a refund.

Answer False – under Section 75 the liability is joint/equal.  This is why Section 75 is known as “Equal liability”

6.    A consumer pays a £200 deposit on a car costing £5000 and pays the rest in cash.  If the car goes wrong the most the card company has to refund them is £200.

Answer False – if it is established that the car dealer is liable for the full £5000 then so too is the credit card company as they are as equally as liable as the dealer.

7.    Section 75 of the Consumer Credit Act cannot apply if a self-employed person buys a car using their credit card and the vehicle is to be used primarily for commercial purposes.

Answer False – the key words being “self-employed” not a limited company.  Under the Consumer Credit Act a “Consumer” is defined as an “individual”.  Note that this is different from how a “consumer” is defined in the Consumer Rights Act.  The self-employed individual may not have rights under the Consumer Rights Act but may still be able to pursue his card company under Section 75 of the Consumer Credit Act for defective goods sold under the Sale of Goods Act.

8.    Section 75 cannot apply if a person uses their credit card to pay for a purchase via Paypal.

Answer True – it is not considered a tri-partite debtor-creditor-supplier agreement needed to be covered by Section 75 as “Paypal” becomes a 4th component in the transaction.

9.    Section 75 cannot apply if a deposit is paid on a credit card and the remainder of the purchase is provided via Hire Purchase.

Answer True – the supplier of the car to the customer and the supplier of the finance to the customer is the same.

10.    A credit card company can never be liable if a consumer uses their credit card to partly (or fully) fund a purchase costing £34000.

Answer False – a bit of a trick question this though as transactions costing over £30,000 and up to £62,620 are covered by Section 75A but this imposes a secondary liability on the creditor and not a joint liability.

 

Authors: Jason Williams

Published: 09 Feb 2017

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