Connected Lender Liability

Section 75 provides that if the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier for misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor. This section applies notwithstanding that the debtor, in entering into the transaction, exceeded the credit limit, so a technical breach of the agreement's terms does not defeat the claim. The creditor who satisfies a claim under section 75 is generally entitled to be indemnified by the supplier for the resulting loss.

The protection is limited by value: it does not apply where the item has a cash price not exceeding [£100] or more than [£30,000]. Within that band, a claimant can pursue the card issuer or other creditor directly instead of, or as well as, the supplier — a significant practical protection where a retailer becomes insolvent or is otherwise unreachable, since the creditor bears equivalent liability for the supplier's misrepresentation or breach.