What is the difference between chargeback and Section 75 protection?

Full answer

Chargeback and Section 75 are both routes for getting your money back when something goes wrong with a purchase, but they differ significantly in their legal status, the type of card and purchase they cover, and how strong your rights are under each. **Section 75 -- a legal right, not just a scheme** Section 75 of the Consumer Credit Act 1974 makes your credit card provider EQUALLY liable, alongside the retailer, for a breach of contract or misrepresentation relating to goods or services you paid for, at least in part, using a credit card. This is a genuine legal right, not merely a voluntary industry scheme, meaning you can pursue your credit card provider directly (and, if necessary, ultimately take the matter to the Financial Ombudsman Service or court) if the retailer has gone out of business, is unresponsive, or refuses to resolve the issue. **Section 75's specific conditions** Section 75 protection generally applies where the item or service cost more than £100 and no more than £30,000 (per item, not the whole transaction if you bought several unrelated items), and applies even if you only paid PART of the cost on the credit card (for example, a card deposit with the balance paid another way) -- provided a genuine credit agreement (rather than, for example, using a credit card purely as a means of moving money via a third-party payment processor in some more complex scenarios) exists between you, your card provider, and the retailer. **Chargeback -- a card scheme rule, not a law** Chargeback is a process run by the card payment networks (such as Visa and Mastercard) rather than a legal right created by Parliament -- it allows you to ask your card provider to reverse a transaction in certain circumstances, such as goods not arriving, being faulty, or not matching their description, or a retailer going out of business before delivering. Because it is a voluntary scheme rather than a statutory right, the card provider has more discretion in how it is applied, though in practice chargeback claims meeting the scheme's conditions are usually honoured. **When chargeback is your main option** Chargeback is particularly important for debit card purchases, since Section 75 only applies to credit cards, not debit cards -- if you paid by debit card, chargeback (subject to the card scheme's specific rules and time limits) is generally your main card-based route for a refund if something goes wrong. Chargeback can also be useful for credit card purchases below the £100 Section 75 threshold, or above the £30,000 upper limit, where Section 75 would not apply at all. **Time limits differ** Chargeback claims are typically subject to shorter time limits set by the card scheme (often up to 120 days from the transaction or expected delivery date, though this can vary), whereas Section 75 claims can potentially be brought later, within the standard six-year limitation period for contract claims in England and Wales (though claiming as soon as possible after discovering a problem is always advisable regardless of the technical time limit). **Worked example** Someone pays £500 for a holiday package by credit card, and the travel company goes out of business before the holiday takes place. Because the cost is between £100 and £30,000 and paid by credit card, they have a strong Section 75 claim against their card provider, who is jointly liable alongside the (now insolvent) travel company. Had they instead paid by debit card, they would need to rely on chargeback instead, a scheme-based rather than statutory right, though usually still effective in a clear-cut case like a company ceasing to trade before delivering the service. **Practical tip** Where possible for higher-value purchases, pay at least part of the cost on a credit card specifically to access the stronger Section 75 protection, and if a purchase does go wrong, check both options -- your card provider can attempt a chargeback in parallel with or before considering a Section 75 claim, since chargeback can sometimes resolve a straightforward dispute more quickly.