Section 75 Claim vs Chargeback
The key differences between a statutory section 75 claim under the Consumer Credit Act 1974 and a chargeback under card scheme rules — when to use each and their respective strengths and limitations.
Overview
When a trader fails to deliver goods or services, or goes insolvent, consumers who paid by card have two potential routes to recover their money: a section 75 claim against the credit card provider (a statutory right under the Consumer Credit Act 1974) or a chargeback through the card scheme (a contractual rule applied by Visa, Mastercard, or American Express). Both mechanisms can result in a refund, but they operate under fundamentally different legal bases, apply to different card types, have different time limits, and provide different levels of protection.
Side-by-Side Comparison
Section 75 Claim
Pros
- Statutory right — cannot be taken away by card provider terms and conditions
- Applies to the full purchase price, not just the amount paid on the credit card
- 6-year limitation period (Limitation Act 1980) — far more time than chargeback
- Binding on the card provider — escalate to the Financial Ombudsman Service if refused
- Applies even if only a small deposit was paid by credit card
- Covers misrepresentation as well as breach of contract
Cons
- Only applies to credit cards — not debit cards or prepaid cards
- Cash price of the item must be between £100 and £30,000
- Does not apply to transactions processed through certain third-party payment processors (disputed)
- Takes longer than chargeback — card provider has 8 weeks to respond
Best For
Credit card purchases of items costing £100–£30,000 where the trader has breached the contract, committed misrepresentation, or become insolvent. The clear first choice where the eligibility criteria are met.
Chargeback
Pros
- Applies to both credit and debit cards (debit card users have no section 75 right)
- No minimum or maximum transaction value
- Can be faster than a section 75 claim for straightforward cases
- Available for a range of reasons: non-delivery, counterfeit goods, incorrect amount charged, cancelled recurring transactions
Cons
- Not a statutory right — the bank has discretion and can refuse
- Short time limit: typically 120 days from payment or expected delivery (varies by card scheme)
- Bank may only refund the amount paid on the card — not a wider claim covering full purchase value
- Trader can rebut the chargeback (a 'representment'), which the bank may accept
- No equivalent of the Financial Ombudsman Service to challenge refusals on legal grounds
Best For
Debit card payments of any amount; credit card payments under £100; time-sensitive situations where a quick refund is needed; situations where section 75 does not apply.
Key Differences
Our Recommendation
If you paid by credit card and the item cost more than £100 and up to £30,000, use section 75 — it is a statutory right, has a 6-year time limit, and the card provider cannot refuse without good reason. If you paid by debit card or the item cost under £100, use chargeback — but act quickly as the 120-day window is a hard limit. In cases of trader insolvency, section 75 is the most powerful tool: the card provider steps into the trader's shoes and cannot avoid liability because the trader is insolvent.
Frequently asked questions
- What is the main difference between a Section 75 claim and a chargeback?
- A Section 75 claim is a statutory right under the Consumer Credit Act 1974, making the credit card provider jointly liable with the trader. A chargeback is a contractual reversal initiated by the bank under card scheme rules like Visa or Mastercard. Section 75 applies only to credit cards for items costing £100 to £30,000, while chargebacks cover both credit and debit cards with no value limits.
- How long do I have to make a claim for either option?
- Section 75 claims have a six-year limitation period under the Limitation Act 1980. In contrast, chargebacks must typically be initiated within 120 days from the payment date or expected delivery date, depending on the specific card scheme. Because the chargeback window is a hard limit, consumers must act quickly if choosing that route, whereas Section 75 provides significantly more time to pursue a refund.
- Can I use Section 75 if I paid with a debit card?
- No, Section 75 only applies to credit card transactions. Debit card users do not have a statutory Section 75 right. However, debit card holders can use the chargeback process, which applies to both credit and debit cards. Chargebacks are often the primary recovery route for debit card payments or credit card purchases under £100, provided the request is made within the required timeframe.
- What happens if my bank refuses to process my claim?
- If a card provider refuses a valid Section 75 claim, you can escalate the matter to the Financial Ombudsman Service within six months of their final response. For chargebacks, there is no equivalent ombudsman service to challenge refusals on legal grounds. The bank has discretion to refuse a chargeback, and the trader may also rebut the claim, leaving the consumer with limited recourse if the bank accepts the rebuttal.
- How much money can I recover with each method?
- A Section 75 claim allows recovery of the full purchase price, even if only a small deposit was paid by credit card, plus consequential losses like return costs. A chargeback typically only refunds the specific amount charged to the card. Therefore, if you paid a deposit by credit card and the rest by another method, Section 75 may recover the entire item cost, whereas a chargeback would only cover the credit card portion.