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Paying with a debit or credit card can provide additional protection if something goes wrong.
It can often be quicker and easier to sort out any problem with the company you bought the goods or services from, even if the company has gone out of business but is continuing to trade (for example, through the appointment of administrators). Most retailers and service providers have well established returns, refunds, and complaints procedures. However, your debit or credit card provider may also be able to help.
Chargeback exists for both credit and debit card purchases. It is a mechanism for your card provider to reclaim money from the retailer's bank.
Chargeback can allow your card provider to provide you with a refund in a number of circumstances, including:
You won't be refunded twice for the same purchase, so if you have received a refund from the retailer already, you can't make a claim from your card provider.
Chargeback is not a legal right (unlike Section 75). You should address a chargeback claim to your debit or credit card provider, which in turn will put in a request to the retailer's bank. The process for managing these claims is determined by a set of rules from American Express, MasterCard or Visa. There are no guarantees your card provider will be able to recover the money through chargeback, or that the trader will accept that you were justified in having the money back.
You should make a claim as soon as you identify the problem or are concerned about a transaction. This is because your card provider usually needs to start the chargeback process within 120 days from when you made the transaction or when you were due to receive the goods or services.
Your card provider needs to provide evidence to the retailer's bank to make a chargeback claim. The evidence can be in the form of a written letter or email from you, an online form completed by you on the card provider's website, or a written form that the card provider completes following a discussion with you.
When you first contact your card provider, you should provide the following information:
Alongside the form, the issuer may need to provide other evidence - and they may contact you after your first discussion with them to obtain this. This can include:
When using a credit card, you also have what is known as Section 75 protection. If it applies, your card provider may be equally responsible for compensating you as well as the retailer or supplier.
This law (part of the Consumer Credit Act 1974) protects you if you use your credit card to buy something costing over £100 and up to £30,000.
If you paid with your credit card, you may be legally entitled to get some or all of your money back if:
If the above applies you may be entitled to your money back even if the company has gone out of business and ceased trading.
You are even able to claim if you only used your credit card to pay for part of the cost of what you bought.
You will need to prove your claim. The retailer's terms and conditions, and/or details of what was said during any transaction that you have relied on, will be important in helping you.
There can be complex legal and factual issues arising and each case will depend upon its own facts.
If it applies, the protection may cover the cost of your original transaction and any losses you have over and above the original amount you paid. For example, if an airline goes out of business and you incur additional costs to get back home, you may be able to claim these (although it may depend on what the airline's terms and conditions say about other losses).
You should address a Section 75 claim to your credit card provider.
You should make a claim within six years of buying the goods or services or, in cases of non-receipt, when you were due to receive them.
You should provide your credit card provider with:
Section 75 does not always apply. For example, you may not be covered in the following situations:
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