Goods and Services bought with credit

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overview

Under our remit we can deal with certain complaints that involve the quality of goods or services bought using particular types of consumer credit.

This is not because we cover suppliers of goods and services under our remit. The businesses we cover provide financial or payment services, or carry on consumer credit activities.

Instead, it is because some consumer protection laws make the provider of credit liable in certain circumstances for some problems with goods or services obtained using credit.

The law in this area is complicated. These web pages do not give legal advice or set out all the relevant consumer law. The aim of this section of our website is to explain:

  • the circumstances in which we can usually help with complaints of this type; and
  • how we normally approach the typical types of complaints we see.

While we can consider complaints about any sort of goods or services bought with certain types of credit, we have also included some extra information about credit purchases we receive many complaints about – such as motor finance, holiday-club membership and furniture and kitchens.

  • section 75 – when can we help?
  • section 75A – when can we help?
  • hire purchase – when can we help?
  • motor finance
  • holiday-club membership
  • furniture and kitchens
 section 75 – when can we help?

Section 75 of the Consumer Credit Act 1974 is complex and this section of our website is not intended to provide a full explanation of the law.

Instead, this web page explains the main requirements of section 75 and how we usually approach the types of complaints consumers bring to us in this area. We also look at some of the common misunderstandings that businesses and consumers have about section 75.

first things first

Section 75 only applies where goods or services are bought using types of consumer credit where arrangements are already in place between the supplier of the goods and the provider of the credit. When the consumer uses that credit to make a purchase, this creates the necessary connection between the consumer, the lender and the supplier.

For section 75 to apply, the provider of the credit and the supplier of the goods need to be separate businesses. Occasionally we see a complaint where the supplier of the goods has itself made the loan to the consumer to buy the goods – so no claim is possible under section 75.

Complaints referred to us are usually about problems with goods bought using a credit card or with a “point of sale loan” (a type of loan arranged through, and paid direct to, the supplier of the goods).

In some cases we see, the consumer has bought online, using a credit card on a website that uses a secure third-party payment system to process credit card payments.

Section 75 may not always apply to transactions made this way, because this payment mechanism can break the chain of arrangements that must be in place between the consumer, the lender and the supplier.

But there are many different types of payment mechanisms used on suppliers’ websites and not all of them prevent section 75 from applying. Where there is a dispute on this point, we look at the specific payment mechanism used and decide whether section 75 applies in the particular case.

financial limits

Section 75 sets a number of financial limits for the transactions it covers. It does not apply to a claim which relates to any single item to which the supplier has attached a cash price of £100 or less, or more than £30,000.

In some cases we see, the consumer and the credit provider disagree on whether or not the transaction falls within these limits. Where this happens, we consider this point first – and then go on to look further into the complaint, if we decide that the transaction is within the limits.

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