Credit card claims, charge backs and the Financial Ombudsman Service (FOS)

Section 75 of the Consumer Credit Act 1974

Under the Consumer Credit Act 1974 if you have a claim against your travel company you also have a ‘like claim’ against your credit card company – although you won’t be able to get compensation from both of them.

To make a claim under s.75 against your credit card company you have to show:

• You bought a travel service for more than £100 and less than £30,000

• The travel company committed a breach of contract or misrepresented the service

• You bought the service on a credit card but not a debit card

• You bought the service directly from the travel company. If you paid a travel agent for the travel service the law is not clear whether you have a claim against the travel company.

• You bring the claim within six years if the travel company is based in the UK. For foreign companies this period may be considerably shorter so it is wise to bring the claim as soon as possible.

If you contact your credit card company they may tell you to contact the travel company, or your insurance company first but this is not necessary, you can go straight to your credit card company if you wish. If you are dealing with an overseas company this may be the best option.

However to succeed in a claim against the credit card company you will have to prove that you have a case against the travel company. So you will need all the evidence such as the paperwork and photos and receipts that you would have used against the travel company.

Your credit card company may try and say that all you are entitled to is a refund but that is not the case. If for instance your travel company has cancelled your holiday or your flight for no good reason and you have had to buy more expensive substitutes you will be entitled to the price of the substitutes so long as that was a reasonable response. These are called consequential losses and you are entitled to them for any breach of contract if you suffer them. This would extend to serious personal injury or illness but for that you should take expert legal advice.

If your credit card company proves difficult you can contact the Financial Ombudsman Service for help. 

Debit and Credit Card Chargebacks

If you have bought the travel service on your debit card or credit card and are not protected by s.75, e.g. because you have paid less than £100 for the service then you may be able to get a refund of what you paid. This is called a chargeback. It is a voluntary scheme run by Mastercard, Visa and American Express.

• You only get a refund for what you paid on the card, no consequential losses

• You must apply within 120 days. However this can be extended to up to 540 days for future services like holidays and flights. The 120 day limit begins to run from the date of departure.

• It also applies to pre-paid cards

• You must first have tried to get your money back from the travel company – unless it has gone bust.

• The travel company may dispute your claim and you may not get your money back if it can prove the claims was unjustified. If this happens and your card company has already given you a charge back it may be reversed by a claw back.

• There are no limits to what you may claim like there is with s.75 except for Mastercard which imposes a £10 minimum

• It does not cover cash withdrawals. So if you withdrew cash to pay for your flights you will not be protected.

• If your card company does not cooperate you can complain to the Financial Ombudsman Service.