Credit Card Claims and Loans in the UK
A brief guide to the Section 75 and Section 140 of the Consumer Credit Act
In an age where cash is used less frequently, most people probably appreciate the convenience and financial flexibility that credit cards and loans provide. Still, not everyone may know the legal protections that come with them. These legal safeguards make sure that lenders and merchants treat consumers fairly. In this article, Fullbrook Associates Head of Legal, Stephanie Connor, will demystify two critical protections in the UK: Section 75 of the Consumer Credit Act 1974 and Section 140 of the Consumer Credit Act 2006. Stephanie will clarify what these provisions mean for you and explain how they can be your trusty sidekicks in resolving disputes or addressing issues with your credit card or loan.
Section 75 - Your Credit Card's ability to protect you
Section 75 of the Consumer Credit Act 1974 is a legal protection that makes credit card providers share the responsibility with the seller for any goods or services purchased using a credit card under specific conditions. To put this in layperson's terms, if a consumer buys something with their credit card and subsequently, the seller breaks the contract or is less than truthful about the product; you have legal protections from your credit card company right up to the ability to claim a refund.
For Section 75 to apply, the purchase must be between £100 and £30,000. So, if you buy an item or service within this price range using your credit card, you'll have Section 75 watching your back.
In addition, you could reclaim the total amount, even if you only paid a fraction of the cost with your credit card. For example, if you put down a £100 deposit on a £200 item with your credit card and paid the remaining balance with another method, Section 75 still covers the total £200.
Some exceptions to Section 75's superhero abilities include cash withdrawals, foreign transactions, and certain types of transactions involving third-party payment processors. However, most credit card purchases directly from a merchant will be covered.
Section 140 - When Credit Relationships turn sour
Section 140 of the Consumer Credit Act 2006 is a provision that enables the court to step in when a consumer credit agreement creates what is legally termed an "unfair relationship" between the lender and the borrower. In everyday language, if you think your lender has deceived you, you can ask the court to review your credit agreement and potentially modify or cancel it.
Unfair relationships can take various forms, such as sky-high interest rates, hidden fees, misleading information, or aggressive collection practices. To make a Section 140 claim, you must prove that the relationship is unfair. If the court agrees, it may adjust the agreement's terms, refund payments, or even cancel the credit agreement entirely.
How to access this protection
If you need to invoke the power of Section 75, contact your credit card provider with relevant documentation and dispute details. This might include receipts, invoices, contracts, or any correspondence with the seller. You should bear in mind there may be time limits to making a claim. This term is usually within six years of the original purchase date (or, in Scotland, five years from when the purchaser first became aware of the problem).
To make a Section 140 claim, it's wise to consult with a legal professional or a debt advice service to see if your case has merit. Should your claim have merit, you must apply to the court for a review of your credit agreement. Pursuing legal action can come with costs, like court fees and legal representation charges. This matter can also be considered by the Financial Ombudsman Service for free. Because of your financial circumstances, you might be eligible for fee exemptions or reductions for court actions. If you're on a low income or receiving certain benefits, this may be the case.
Grasping the nuances of Section 75 and Section 140 protections is essential for UK consumers who use credit cards or loans. By keeping yourself abreast of your rights and knowing the steps to take when making a claim, you can do your best to ensure that you receive fair treatment and have a plan of action when faced with unpleasant issues related to your credit card or loan. Remember, these protective measures are in place to safeguard you and your money. If you feel you have a claim, then hold back from seeking assistance or taking appropriate action. The law is there for just such situations.
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Fullbrook Associates - Specialised Services Delivered by Experts
Fullbrook Associates are experts in the field of compensation claims. We assess the merits of your case to establish whether we believe you have a reasonable prospect of success. If you wish to pursue a claim, our legal team, who specialise in compensation, can progress your case.
Please be aware. You are under no obligation to complete a claim using our services. You can do the claim directly yourself to your creditor for no charge. If you have approached your creditor first, you can also approach the Financial Ombudsman Service for free if you wish for them to review your case.
You do not require to use a claims management company, you can contact the Financial Ombudsman Service or your creditor yourself, for free.