Refund Under Section 75 Consumer Credit Act 1974

The Section 75 Consumer Credit Act 1974 provides that when a consumer buys something on credit, and subsequently has the legal basis for a claim in in misrepresentation or breach of contract against the seller/supplier, the consumer will also have a claim against the credit provider.

Section 75 rights form part of the broader consumer law protections, giving carholders additional avenues to recover losses from a credit provider. At Stormcather Law, we help people maintain their consumer law credit card refund rights.

In short, the credit provider is jointly and severally liable to the consumer.

What is the Consumer Credit Act (the CCA)?

The Consumer Credit Act 1974 regulates personal credit and hire agreements between lenders and consumers and includes personal loans, credit cards, store cards  hire purchase agreements, conditional sale agreements and hire and lease.

Under the Consumer Credit Act 2006, the scope of the those to whom the law applied was extended to include:

Definition of ‘individual’

• a partnership consisting of two or three persons not all of whom are bodies corporate; and
• an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership;

Section 75 Consumer Credit Act is limited to the purchase of any single item costing £100 – £30,000.

What are the benefits?

Firstly, the customer does not have to pay the whole price with credit or using a credit card to be protected under section 75.

Secondly, unlike the Consumer Rights Act which only requires the supplier to refund the purchase price, under s75, the customer has a claim for damages for breach of contract meaning the consumer may be able to claim for consequential losses as well as the purchase price.

However, section 75 is not a trump card, or a guaranteed route to refund as it was once perceived. Instead, the flip side of joint and several liability is that the credit supplier or card provider has the same potential defences to misrepresentation and breach of contract.

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What’s excluded

The CCA does not cover credit agreements over £25,000 which are wholly or predominantly for business purposes.

However, it is not enough to simply to claim the credit or hire agreement is for business purposes but instead, the agreement should contain the declaration in the form set out in schedule 3 of The Consumer Credit (Exempt Agreements) Order 2007 and be signed.

This is similarly the case for high-net-worth borrowers and hirers in schedule 1, The Consumer Credit (Exempt Agreements) Order 2007.

In any event, the burden of proving an agreement is exempt falls on the credit or credit card provider.