Here are the basic facts about section 75 I have copied from this site
http://www.financial-ombudsman.org.uk/publications/technical_notes/goods-and-services-bought-with-cr...
what went wrong?
Section 75 only helps the consumer where there has been either a breach of contract or a misrepresentation by the supplier of the goods and services. These are legal terms. But for the purpose of section 75 and put very simply:
- A breach of contract is where the supplier fails to do what the contract says it must, either expressly or by implication.
For example, there is a breach of contract where goods that have been paid for are not supplied at all, or are not up to standard.
- A misrepresentation is an incorrect statement of fact that causes the consumer to go ahead with the contract.
For example, there is misrepresentation if the supplier persuades a consumer to buy an expensive piece of software - by telling him wrongly that it will be compatible with his existing PC operating system.
We do not expect consumers to make complicated legal arguments about breach of contract or misrepresentation. Instead, we ask the consumer to tell us exactly what happened, so that we can assess for ourselves whether there are grounds for a successful claim under section 75.
In some of the cases we see, there is a question about whether the person who contracted to buy the goods is the sameperson who was provided with the credit.
This is important because of the connection between the consumer, lender and supplier that is necessary for section 75 to apply. Where this question arises, we consider this point first, taking into account the facts in the case - and then we go on to look further into the complaint, if we decide that the transaction is covered by section 75.
common misunderstandings
The complaints we see show that there are frequent misunderstandings by consumers and businesses about how section 75 works. Here are some of the most common misunderstandings we see:
Section 75 gives an automatic entitlement to a refund, if credit was used to fund the purchase.
No. There is no automatic entitlement to a refund under section 75. Instead, the consumer has the same claim against the lender that they would have against the supplier of the goods, if there were a misrepresentation or a breach of contract by the supplier.
You have to take the supplier to court before you can claim against the lender under section 75.
No. The consumer does not have to take the supplier to court before making a claim against the lender under section 75. In most of the cases we see, the consumer will have complained initially to the supplier - because this is usually the quickest way to get things put right. But the law does not require the consumer to pursue the supplier first, for section 75 to apply.
All purchases made with plastic cards are covered by section 75.
No. Section 75 only covers transactions made using consumer credit. So only transactions made with credit cards (including most store cards) are covered. Transactions made using other types of plastic cards - like charge cards or debit cards - are notcovered by section 75.
Section 75 gives you a "cooling-off" period.
No. By itself, section 75 does not give any "cooling-off" period to the consumer. So, for example, section 75 would not allow a consumer to cancel a transaction following a change of heart about a purchase.
You can claim under section 75 if you do not get value for money.
No. Section 75 gives the consumer a right to claim against the lender in specific circumstances - where there was a misrepresentation or a breach of contract by the supplier. But there is no claim simply because, for example, you find you could have bought the same goods at a better price somewhere else - or if, on reflection, you feel the purchase was not worth the money.
If you bring a claim under section 75, the most you can get back from the lender is the amount of the credit.
No. Where section 75 applies, it gives the consumer exactly the same claim against the lender as they would have against the supplier of the goods or services, if there were a misrepresentation or a breach of contract by that supplier. This might be more than, or less than, the amount of the credit transaction - depending on what happened.
Paul
