Taking A Chance On Section 75 (Consumer Credit Act 1974)

Image: sutirta budiman/sutirtab/Unsplash
Image: sutirta budiman/sutirtab/Unsplash

Monopoly players know that if you are lucky you can be dealt a “Get out of Jail Free Card”. Increasing numbers of consumers are becoming aware that, by paying with a credit card, they may avoid many of the problems that can arise with retailers.

Section 75 of the Consumer Credit Act provides that, for certain types of debtor-creditor-supplier arrangements, any claim the debtor may have against the supplier in respect of misrepresentation or breach of contract, he can also maintain against the creditor who will have the same liability for it as the supplier.

The types of arrangement that provide this form of consumer protection depend on there being a pre-existing arrangement between the creditor and supplier to provide credit to the debtor for certain goods or services. So it covers credit or store card purchases, but not items paid for with debit cards or charge cards such as American Express. Certain types of agreements for financing items such as motor vehicles or furniture will also come under Section 75 protection.

A classic example of the application of Section 75 is where goods are bought by a credit card from a retailer who then goes into administration before the goods are delivered. In the absence of those goods the credit card company would be liable to the customer for a refund of the purchase price.

Section 75 does not only apply to goods. Services are also covered. So if building work is carried out and found not to be up to standard then, if payment was made by credit card, the credit card company can be liable for the remedy. Basically if goods or services fail to materialise, are faulty or mis-sold in any way, then the creditor can end up being responsible for problems it played no part in creating.

Of course, any creditor caught in this way will be entitled to be indemnified by the supplier, but that is of no comfort if the supplier has gone out of business.

Section 75 imposes financial limits on transactions. It does not cover claims relating to a single item of less than £100 or more than £30,000. But even these restrictions can carry a sting in the tail. A motorist buys a new car. He pays £100 on his credit card as a deposit to secure the vehicle and arranges for a bank loan (not covered by Section 75) for the balance. The dealer goes bust. Payment of part of the transaction by the credit card would enable the motorist to claim all his money back from the credit card company. He will not even have to pass Go!

Greenhalgh Kerr
Olympic House, Beecham Court,
Smithy Brook Rd,
Wigan WN3 6PR

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We are confident in our work and we know that recoveries is a key part of a lender or creditor’s business

We are confident in our work and we know that recoveries is a key part of a lender or creditor’s business. We have designed our pilot projects to give lenders and creditors the comfort and confidence in our service before formally and fully switching recoveries providers. This time also allows new clients to benchmark our service levers and results against existing providers and others.

How it works


You choose 10 recoveries cases

You choose 10 recoveries cases to get us started. We’ll deliver our usual onboarding protocol where we’ll get to know you and your systems, culture, methods, preferences, and requirements.


We get started

We assess each case by setting a strategy then grading and reporting on the case in terms of prospects and timescales and cost. We make immediate contact with debtors, and pursue a recovery in our tried and tested ways.


We review

We deliver ongoing, structured, tailored reports as per your needs and carry out a full 3-month review on these 20 cases. There we’ll discuss how we have worked together, patterns we have seen in your borrowers, your systems, your documents, your pre-legal conduct, outcomes, highs and lows, legal costs (and costs borne by debtors), and possible improvements in all of these.


No strings

We carry on working in this way until all cases have been concluded. You are then free to carry on your discussions with us or to use the experience and market intelligence gained by working with us in the future.

Lenders and creditors have nothing to lose, and everything to gain, by engaging with us on a pilot project.