Yesterday it emerged that the website Paperticket.co.uk, a website selling concert tickets, had been shut down by the Metropolitan Police under suspicion of fraud under the ‘Proceeds of Crime Act’.
As a consequence, thousands of people have been warned they may not receive their tickets – except for the lucky proportion that used their credit cards and will so likely be covered by section 75 of the Consumer Credit Act.
However, it’s not just fraudsters that could cause consumers to be left out of pocket in these hard times.
The governor of the Bank of England today predicted that the UK economy is likely to slump into recession in 2009, which will likely cause some businesses to collapse, or suffer from severe difficulties.
Indeed, we have already seen plenty of examples of this so far this year what with the collapse of the UK’s third-largest tour operator, XL Leisure Group in mid-September and the last-minute buyout of furniture chain MFI to save it from bankruptcy three weeks ago.
But, did you know that by using your credit card to make purchases you can protect yourself from losing money on the goods and services you buy, in the event of the company not delivering what they promised?
This is all thanks to Section 75 of the Consumer Credit Act 1974.
According to Consumer Direct, a government funded advice service, if you have purchased goods or services using a form of credit, e.g. a credit card, “you may have an equal liability claim against the credit firm under section 75 of the Consumer Credit Act 1974 provided the contract amount is over £100 but less than £30,000”.
What’s more, if you pay for part of the purchase on your credit card and then pay for the rest in cash, you will still be covered for the purchase as long as it was for a product/service costing between £100 and £30,000.
One of the things likely to put you off using a credit card in these hard times is the thought of getting into debt. But, if you are sensible about it you can bear in mind that it was probably a purchase you were already planning to make and so you should already have the money budgeted for it. This means you can pay the credit card bill off straight away, meaning you won’t accrue any interest charges and won’t be left with debt. The only difference with using a credit card in this case is that you will get the added protection of section 75 for free, which could prove invaluable in the coming months.
If you did need a bit of time to pay off the debt, you could get a 0% purchase credit card and, with a bit of discipline, pay it off in monthly instalments, without paying any interest, for around 6-12 months.
Credit cards, like many other things in life, do serve a very useful purpose, but ONLY if they are used sensibly and the protection offered by section 75 is one obvious plus point for considering getting a credit card.
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