Handle Section 75 claims from customers

Not every claim qualifies under Section 75. Check each of the following conditions before proceeding with a full investigation.

Section 75 qualifying conditions

• Cash price between GBP 100 and GBP 30,000: The item must cost at least GBP 100, even if only part was paid on credit
• Debtor-creditor-supplier (D-C-S) agreement: Most credit card transactions qualify under section 12(b) or 12(c) CCA 1974
• Breach or misrepresentation by the supplier: Goods faulty, services not provided, or false statement that induced the purchase
• UK-regulated credit agreement: The CCA 1974 applies to agreements governed by UK law

If the claim appears to qualify, gather evidence from both the customer and the supplier. Your investigation must be fair and thorough -- the FCA expects you to consider the claim on its merits, not simply reject it because the supplier disputes liability.

Investigation steps

• Contact the supplier: Request their account, contracts, correspondence, and evidence of delivery or performance
• Gather customer evidence: Purchase agreement, receipts, photographs of faulty goods, and independent reports
• Assess breach: Do the facts support breach of contract or misrepresentation?
• Calculate loss: Determine the customer's actual loss, including reasonably foreseeable consequential losses

Issue your final response within 8 weeks. If accepting the claim, specify the remedy offered. If rejecting, give clear reasons and inform the customer of their right to refer to the Financial Ombudsman Service within 6 months of your final response.

Response options

• Accept: Refund the purchase price, arrange repair or replacement, and compensate for consequential losses
• Reject: Explain specifically why the claim does not qualify or why evidence does not support it
• Partial acceptance: Explain your reasoning clearly and offer proportionate redress

If you have paid the customer's Section 75 claim, you have a right of indemnity against the supplier under section 75(2) of the CCA 1974. The supplier is ultimately responsible for the breach, and you can recover any sums paid to the customer plus reasonable costs.

Recovery process

• Chargeback first: Initiate the card scheme chargeback (Visa or Mastercard) as a faster recovery route. Chargeback and Section 75 are separate rights
• Formal demand: Write to the supplier with a section 75(2) indemnity demand, enclosing evidence and proof of your payment to the customer
• Supplier insolvency: Recovery may be limited if the supplier has ceased trading, but the customer's claim against you remains valid