Huge change to credit card rules for millions – what it means for shoppers

Consumers will lose full refund guarantees from credit card providers


Consumers will lose full refund guarantees from credit card providersCredit: Alamy

An IMPORTANT rule allowing customers to get a refund from their credit card company will be dropped and replaced with new rules.

The government announced plans to scrap Section 75 of the Consumer Credit Act this morning – along with dropping the rest of the legislation it covers.

The way consumer protection laws work is set to change - but not yet


The way consumer protection laws work is set to change – but not yetCredit: Alamy

Under Section 75 law, consumers can claim a full refund for defective goods or services purchased on their credit card from the card provider if the retailer fails to pay.

That means there’s a double layer of protection for customers who buy high-value items that go wrong.

Existing rules will remain in place for the time being, and shoppers will be notified in advance of the change.

Exactly what will replace them is yet to be decided.

New rules often have to be passed into law before they take effect, which can take a while, often years.

There will be a further consultation about shifting responsibility for ensuring consumer protection to the Financial Conduct Authority.

Sarah Coles, personal finance expert at Hargreaves Lansdown, said the loss of the right to a full refund over the holidays is just one example of what consumers could lose when the Act is introduced.

“Currently you can pay a holiday deposit with your card and as long as it’s between £100 and under £30,000, the full cost of the holiday will be covered,” she said.

“One change could mean you need to put in all the plastic to get the same protection.”

Another example is if you buy tickets to a concert that has been canceled.

“Now you also claim your train and hotel tickets,” says Sarah.

“But some people cited in the government paper argued that this should not be included in the new rules.

“There are also questions about whether people can claim from their credit card without contacting the provider first, which can make claiming cash back complicated and expensive. more time.”

However, the new rules could still strengthen consumer rights, depending on what is decided.

Why get rid of the Consumer Credit Act?

The government’s response to the “Consumer Credit Act Reform 1974” consultation stated the rules were no longer fit for purpose.

Andrew Griffith, the Treasury Department’s economic secretary, said in 1974 the Consumer Credit Act (CCA) was a “landmark part of the
law” .

He called it “a new and comprehensive set of protections for

But he added: “The world has changed since 1974.

“Current legislation is not suitable for technology
was not formed nearly 50 years ago.

“Now is the time to be as ambitious as our predecessors were in 1974 and fundamentally reform the regulatory approach to consumer credit in the UK.”

The Sun asked the Treasury for a comment.

Sarah Coles, head of personal finance at Hargreaves Lansdown, called the move “disturbing”.

“The Consumer Credit Act has saved millions of lives,” she said.

“Section 75 dragged them into our black hole, where the goods or services hadn’t been delivered, and they were able to turn to their credit card company to salvage the situation.”

“So the fact that the government is planning to scrap this act will certainly cause concern.”

How are shoppers protected?

For now, Section 75 is still in effect, meaning you’re entitled to a full refund from the retailer where you purchased the item or the credit card provider you used at checkout.

What is Section 75?

Section 75 of the Consumer Credit Act is one of the most important pieces of consumer law in the United Kingdom.

That means if you pay for a large purchase with your credit card and something happens – like the goods don’t deliver or the store goes bankrupt – your card provider is also responsible for your refund just like the retailer.

There are a few caveats to legal protections – the purchase you’re making should cost between £100 and £30,000 and it’s important to remember it only applies to credit cards – but it helped Countless Britons got their money back after they were dropped.

What does Section 75 cover?

The protection applies to most credit agreements, as does credit cards, it also applies to store cards and store installment credit transactions.

So, if the retailer you’re buying from goes out of business or your merchandise isn’t delivered or the items are defective, you have a legal right to go to your card provider to get your cash back.

You’re even protected if you haven’t paid for the item in full – assuming you’ve paid a deposit, you’ll still be covered, as long as the total cost of the item is more than £100.

Section 75 also applies to goods purchased online, by phone or by mail order that are also shipped to the UK from abroad.

Remember that you are not covered by Section 75 if you pay for items with your debit card.

How can I claim under Section 75?

To make a claim, contact your credit card provider – your first port of call should be their customer service phone number – and let them know you want to make a claim under Section 75.

It will then send you a request form that you can fill out and which your provider will use to process your application.

Your card company may ask you for proof such as a receipt or verification report that the item is defective.

In the event that the retailer is not bankrupt, you should file a complaint with them first, but if they don’t care enough about your care, you should contact your card provider.

What should I do if my request is denied?

If you find that your card company has been unable to help and denied your request – even though you have a legal right to a refund – then you should take your case to the Financial Ombudsman Service. main (FOS).

Which consumer group? say you should ask you tag provider for something called “deadlock message” so you can take it to FOS, who will decide if you get fair treatment – and if you get a refund.

If more than eight weeks have passed since you filed your claim with your card issuer, you can go to FOS without bothering to mail.

Better permissions can be stored for some

Sarah said some possible changes could be positive. Here she takes us through what’s to come.

hire buy

In 1974, consumers generally purchased lower-value and lower-risk items using financing.

It has now taken center stage for motorists, with most people renting out their cars for a few years before switching to a new car.

Vulnerable people rely on it to purchase household items such as washing machines, refrigerators and sofas.

That means there is now a strong argument that users should have the same protections as other borrowers.

However, reading the consultation responses shows that this view is far from unanimous, so there are no guarantees.

People who get sick easily

A positive development is the opportunity to consider the needs of more vulnerable people in the new regulations.

For those struggling with more complex numerical calculations, it is likely that the information will be written in pounds and pence instead of using percentages.

There’s also the opportunity to get rid of a ton of jargon, so people aren’t deterred by how lenders talk to them.

For those struggling with mental health, there may be an opportunity to review the Notice of Debt and the Notice of Breach – both of which can be overwhelming.

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In their current form, they can be so alarming that it actually makes it impossible for people to ask for help from their lender.

More flexibility in language and content can allow lenders to be more sensitive to people’s needs.

Russell Falcon

Russell Falcon is a USTimesPost U.S. News Reporter based in London. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. Russell Falcon joined USTimesPost in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing

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