Section 75 or Chargeback: Which Protection to Use

If something you paid for by card goes wrong, two different protections can get your money back, and they work in different ways. Section 75 is a legal right under the Consumer Credit Act 1974. It makes your credit card provider jointly liable with the retailer when you buy something costing over £100 and up to £30,000, so you can claim a refund from the card company if the goods are faulty, never arrive, or are not as described¹.

Chargeback is not a law. It is a process run under card scheme rules by Visa, Mastercard and American Express, and it applies to both credit and debit card purchases of any value³. It covers goods or services you did not receive, including when a company has gone out of business, faulty or counterfeit goods, being charged the wrong amount or twice by mistake, and being charged for a repeat payment after cancelling a subscription⁵.

The practical difference is what happens when things go wrong. Section 75 gives you a statutory claim against a lender. Chargeback asks your bank to try to recover the payment from the trader's bank, and there is no guarantee it will succeed⁶.

Section 75 is a legal right, chargeback is a card scheme process

Section 75 is part of the Consumer Credit Act 1974. It lets you claim a refund from your credit card company if something goes wrong with a purchase, and it applies even if you only put part of the cost on the card¹². The credit card provider has equal responsibility with the seller for faulty, unsatisfactory or undelivered items¹⁴. It also covers associated costs, foreign transactions, closed accounts and store cards¹⁵.

Chargeback is different in kind. It is not a statutory right; it exists under card scheme rules that participating banks subscribe to⁴. It is the term card providers use for reclaiming a card payment from the trader's bank⁹. Because it is voluntary rather than a legal protection, the outcome depends on the scheme rules and on your bank's willingness to pursue the claim¹⁶.

The Financial Ombudsman Service has handled a rising number of complaints about both routes. In 2020/21 it received 72% more complaints about Section 75 and chargeback claims, including those about delays in processing claims¹⁷.

What chargeback covers: undelivered orders, faulty items and failed firms

Chargeback covers a defined set of problems. If goods are not delivered, arrive damaged or not as described, or the trader goes out of business, you may be able to use chargeback¹⁹. It also covers faulty, counterfeit or defective goods, being charged the wrong amount or charged twice by mistake, and being charged for a repeat payment after you cancelled a subscription⁵.

The failed firm scenario is where chargeback often matters most. If a company stops trading, a debit card chargeback may be the only card-based route to recover money, because Section 75 does not apply to debit cards²⁰. For credit card purchases over £100, Section 75 gives a claim against the lender instead.

There are limits to what chargeback will return. It only applies to the amount of the transaction made on the credit or debit card, so if you paid only a deposit on the card, only the deposit would be returned³. It also covers only the amount paid on the card, not any other consequential losses⁶.

Chargeback works on debit, credit and prepaid cards

Chargeback exists for both credit and debit card purchases³. It applies to all debit card transactions, including goods costing less than £100, although the exact rules may vary between the Visa, Maestro and American Express networks²². It is also an option for credit card spending under £100, where Section 75 does not apply²³.

This makes chargeback the main card-based protection for debit card users. Debit cards offer chargeback protection on all purchases, but not Section 75¹⁴. If you paid by debit card, you can use chargeback however much you paid²⁴. Chargeback applies to both credit and debit card purchases of any value, through voluntary industry schemes run by Amex, Mastercard and Visa²³. If you used a credit card and the price of the goods or services was less than £100, you may be able to use the chargeback scheme because your rights under the Consumer Credit Act 1974 would not apply¹⁰.

Buy now, pay later is a further case. If you used a debit or credit card to make payments to a buy now, pay later account, you might be able to start a chargeback on that card, but your bank or credit provider might not agree to it¹. Deferred payment credit agreements do carry Section 75 protection, so you may be able to get a refund from the lender if something goes wrong with what you have bought²⁵.

Card fraud is a separate route: zero liability and reporting

Losing a card or having it used without your permission is not a Section 75 or chargeback matter. It is fraud, and it has its own protections. Both Visa and Mastercard offer a zero-liability policy: you will not be liable if your card or card number is used without your authorisation, as long as you have complied with the Cardholder Agreement²⁶.

Report a lost or stolen card to your provider immediately. The zero-liability policy sits alongside the card scheme rules, and it applies to unauthorised use rather than to a purchase that went wrong²⁶. If your card is used fraudulently, the dispute is about authorisation, not about whether a trader delivered what you paid for.

There is a related trap worth knowing about. When a card is replaced, recurring payments can follow the old card details to the new one through updating services. Mastercard calls it the Automatic Billing Updater (ABU) and Visa's scheme is the Visa Account Updater (VAU)²⁷. That means a subscription you thought had ended can continue on a replacement card.

A purchase dispute, a chargeback and card fraud are handled through different routes.

Where chargeback may not get your money back

Chargeback is a request, not an entitlement. There are no guarantees your bank will be able to recover the money through chargeback⁷. If you paid with a debit or credit card, you can still ask for chargeback, but your bank or credit provider might not agree to do it²⁰.

Several situations remove the protection altogether. You will not automatically be protected by either Section 75 or chargeback if you purchase through a third-party website²⁹. If you used a debit card or a credit card to service an online payment method such as PayPal, it is unlikely you will be able to use either the Consumer Credit Act 1974 or the chargeback scheme to claim from your card provider¹⁰. PayPal offers its own Buyer Protection, but this can sometimes make a Section 75 or chargeback claim difficult³⁰.

Pay by Bank, where you pay a business directly from your bank account using open banking instead of a card, removes both protections. If you use open banking to make a payment to a business directly from your bank account, you lose Section 75 and chargeback³¹. It lacks Section 75 and chargeback protections³².

How to raise a chargeback claim

Start with your own bank or card provider, not the card scheme. Chargeback is operated by Visa, Mastercard and American Express, but it is your provider that attempts to recover the payment from the trader's bank³. Ask your card provider to attempt to recover the payment with evidence of a breach of contract, and check how the scheme rules apply to your card, whether internet transactions are covered, and the time limit for making a claim³.

The time limit matters. Chargeback applies if you paid by debit card, or on a credit card for an item costing less than £100, and it is less than 120 days since the purchase⁸. One provider's example describes a customer who was offered a voucher instead of a refund for a cancelled flight; if he got in touch within 120 days from the service date, he could ask for a chargeback to get his money back³³.

Put your claim in writing. Send a letter to the debit or credit card company's customer services manager with supporting documentation such as invoices, receipts and details of estimated delivery dates³⁴. The FCA expects credit and debit card providers to handle Section 75 and chargeback claims in a reasonable timescale and to explain any delays or declinature clearly, including checking travel insurance cover, including policies held as part of a packaged bank account⁶.

When a firm fails or a service is cancelled

A company going out of business is one of the clearest cases for a card claim. If goods are not delivered or the trader goes out of business, chargeback may apply¹⁹. For credit card purchases over £100, Section 75 gives a claim against the lender instead¹.

Event and travel bookings have their own rules. If you bought your ticket from an official seller you can get a refund if the organiser cancels, moves or reschedules the event, but you are not entitled to a refund if you change your mind about going or realise you cannot go anymore³⁵. Some sellers might refund postage if, for example, the event is cancelled before the tickets are sent³⁵. Society of Ticket Agents and Retailers members should refund face value if the event is cancelled and the organiser has agreed to refunds³⁵.

The Financial Ombudsman Service has warned festival goers that refunds are not guaranteed²⁹. Accepting a replacement flight, package holiday, or voucher or credit note may settle the current claim; if the provider fails to honour the alternative booking or the voucher expires unused, chargeback and Section 75 rights may then be available³. There is no Section 75 or chargeback claim for accommodation if the hotel is still open and able to honour the original booking, since the hotel has not broken its contract³.

You can ask your credit card company to reimburse the cost of gift cards over £100 if the company goes bust before you can spend them³⁶.

What protects you, and where it stops

Section 75 is the stronger protection because it is a legal right. It applies to credit card purchases over £100 and up to £30,000, and it makes the card provider jointly liable with the retailer¹. It covers faulty goods, items that never arrive, items not as described, and cases where the seller misleads you¹⁵.

Chargeback fills the gaps but carries more risk. It applies to both credit and debit card purchases of any value, through voluntary industry schemes run by Amex, Mastercard and Visa³. It is not a legal protection, and there are no guarantees your bank will recover the money⁷.

If a claim is rejected, you can complain. The Financial Ombudsman Service handles disputes about Section 75 and chargeback claims, and it has ordered redress in individual cases. In one case it decided a full refund was appropriate, telling the bank to reconstruct the credit card account as if the customer had not paid the £7,500, refunding any interest and charges, and adding interest to any credit balance refunded³⁷. In another, it told a bank to refund £100,000 in full, plus interest from the date of loss to the date of the refund³⁸.

Where a firm is required to give a refund or take other remedial action, it must also refund any charges for which the banking customer is responsible and any interest the customer must pay as a consequence of the non-execution or defective execution of the payment³⁹.