Protected when you pay by card

Every day more and more of us are shopping online from home. Increasingly, we’re bringing the outside in: streaming a film rather than going to the cinema, doing the weekly shop from the comfort of our sofas, and bringing restaurant meals to the dining table with food delivery services. So it’s important we do so safely. 

One advantage of paying with your debit or credit card is that it may protect you when something goes wrong.

As part of Visa’s commitment to consumer protection, we have an established process for banks that can help you get your money back when you haven’t received the goods or services you’ve paid for using your Visa cards. 

Examples of this could be when you’ve made an online purchase and been sent the wrong product and can’t return it. Or, perhaps – as every holidaymaker fears – your flight is cancelled at the last minute as an airline goes into administration.  

The first step in such situations is to contact the merchant, retailer, or tour operator you made the purchase from to understand whether you are covered by a bonding authority or insurance scheme. If you’re not fully covered, and only partial or no compensation will be paid through this route, you can then speak to the bank that issued your card to look at more options. 

UK Finance, the industry body for the UK’s financial services industry, has developed guidance around protections available to consumers who have purchased goods or services using a UK-issued debit or credit card. These include both chargebacks and Section 75 credit card protection.

What is a chargeback?

A chargeback (otherwise known as a dispute) is a way for the bank that issued your card to reclaim money from the retailer’s bank when you do not get the goods or services you paid for, including if the retailer or supplier has gone out of business.

Chargebacks are not a legal right, but if you have paid on a Visa debit or credit card, you should address a chargeback claim to the bank that issued your card, and they can then put in a request to the retailer’s bank. The process for managing these claims is determined by the Visa rules (rules we set out for financial institutions who want to issue or accept Visa to help us maintain a fair and high standard of service). While there is no guarantee that your bank will be able to recover the money through chargeback, they will assess your claim fairly.

With a chargeback, the value claimed cannot exceed the value of the original transaction. Where a partial refund has already been made, any chargeback will only cover the remaining amount of the original transaction.

What is Section 75?

When using a credit card, you may also have Section 75 protection. This provision (part of the Consumer Credit Act 1974) protects you if you use your credit card to buy something costing more than £100 and up to £30,000.

This protection covers the whole cost of an item or service even if you have only paid the deposit on your credit card. It may also cover additional reasonable expenses.

There are certain requirements that need to be fulfilled for a Section 75 claim to be available. The company from whom you bought the goods or services must be the supplier of those goods and services.

You are legally entitled to get your money back if the retailer you purchased the product or service from:

• breaks their contract with you, including if they go out of business;
• does not deliver what they have promised.

There are some instances where Section 75 does not apply, such as when goods or services are paid for by a secondary cardholder or if you bought through an intermediary. This includes aggregators which sell on flight and hotel bookings. However, such agencies often have their own payment protection systems in place.

More information about chargebacks and Section 75 is available on the UK Finance website.

In the meantime, at Visa we are continuing to work closely with our financial institution clients to support them in managing claims from affected cardholders.

Examples, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. does not make any warranty or representation as to the completeness or accuracy of the Information within this document, nor assume any liability or responsibility that may result from reliance on such Information. The Information contained herein is not intended as legal advice, and readers are encouraged to seek the advice of a competent legal professional where such advice is required.