When a point-of-sale loan is used to finance an electronics purchase, Section 75 of the Consumer Credit Act applies in a similar way to credit card purchases. Below is a list of examples of what does and doesn't constitute a valid claim under Section 75 when the finance is provided by a finance company.
Valid Claims
These involve breaches of contract or misrepresentation directly related to the loan-financed purchase.
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The product is faulty
- Example: A customer finances a £2,000 TV through a point-of-sale loan, and it develops an obvious fault within weeks while under warranty. The retailer refuses to repair, replace, or refund.
- Reason: Breach of contract—the product is not of satisfactory quality.
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The electronics product was never delivered
- Example: A customer finances a £1,000 mobile phone, but this was never delivered, and the supplier will not provide any evidence of delivery or arrange for a replacement
- Reason: Breach of contract—goods were not supplied
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The product was misrepresented
- Example: A customer finances a £2,000 appliance that was advertised as having certain smart features such as remote access but the actual item received does not have these features
- Reason: Misrepresentation—false claims about the product.
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The retailer goes bust before installation is complete
- Example: A customer finances a £3,000 air-conditioning system, and the retailer installs only half of the system before going into liquidation.
- Reason: Breach of contract—services were not provided.
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The product is not as described
- Example: A customer finances a £1,500 smartphone that was advertised as having a 256GB storage capacity but the item received only has 128GB.
- Reason: Breach of contract—the product is not as described.
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A promised refund was not provided
- Example: A customer returns a defective £1,200 mobile phone and are promised a refund, but the retailer fails to issue it.
- Reason: Breach of contract—failure to honour refund terms.
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The supplier delivered substandard goods
- Example: A customer finances a £1,800 speaker system that is defective or fails to meet reasonable expectations of quality.
- Reason: Breach of contract—the goods are not fit for purpose.
Invalid Claims
These fall outside the scope of Section 75 or involve issues not covered by it.
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The product was below £100 or above £30,000
- Example: A customer finances a £90 electronic gadget or a £35,000 high-end sound system.
- Reason: Section 75 applies only to purchases between £100 and £30,000 not the total order value.
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The fault occurred outside the warranty period
- Example: A customer finances a £1,200 dishwasher, but it stopped working two years later outside the retailer’s warranty period.
- Reason: Section 75 doesn’t apply to problems arising from wear and tear or expired warranties.
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The issue is related to accidental damage
- Example: A customer finances a £2,000 laptop and accidentally spill water on it.
- Reason: Section 75 does not cover user-caused damage.
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You used a third-party / different payment service
- Example: A customer financed the product through a third-party payment platform that it isn’t regulated under the Consumer Credit Act.
- Reason: Section 75 requires a direct relationship between the lender, retailer, and consumer so only applies to goods purchased using the finance provider
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The problem is dissatisfaction, not a fault
- Example: A customer finances a £1,500 monitor but later decide it doesn’t meet your expectations even though it matches the description.
- Reason: Section 75 does not cover buyer’s remorse or subjective dissatisfaction.
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The product was lost or damaged during delivery
- Example: A customer finances a £1,200 smart TV, and it is damaged by the courier before it arrives.
- Reason: Delivery issues are typically the retailer or courier’s responsibility, not a Section 75 matter.
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You financed the product for business use
- Example: A customer finances a £4,000 professional-grade printer for your company.
- Reason: Section 75 only applies to consumer transactions, not business purchases.
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The issue is purely with the service and not the goods
- Example: A customer finances a £1,500 smart fridge freezer and are unhappy with the technician who delivered and installed it, but the item itself works perfectly.
- Reason: Section 75 do not cover standalone service disputes unless they directly relate to the financed goods.
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Cancel the loan agreement but don’t return the product
- Example: A customer financed a £1,200 phone and cancelled the loan without returning the device.
- Reason: Breach of terms on your part invalidates a claim under Section 75.
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Change of mind outside the 14 day return period
- A customer finances a £1,500 phone but decide you no longer want it after 25 days. The retailer’s stated policy for online sales is "14 days from the day you receive your order."
- Reason: This is outside the retailer’s terms and conditions, and there’s no breach of contract or misrepresentation.
Key Points to Remember
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Direct finance relationship
- The finance company, retailer, and consumer must be directly connected.
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Purchase limits apply
- The purchase price must be between £100 and £30,000.
- Items priced at less than £100 are only covered under Section 75 if they are purchased as part of a single transaction (eg point of sale loan) between £100 and £30,000
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Covered issues
- Claims must relate to breach of contract or misrepresentation, such as faults, non-delivery, or misdescriptions.
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Consumer use only
- Section 75 does not cover goods purchased for business purposes.
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Terms and Conditions Apply
- If the retailer’s terms and conditions state that returns or cancellations are not allowed outside a certain timeframe or for non-defective products, then Section 75 cannot override these terms unless there is a legal obligation (e.g., misrepresentation or breach of consumer rights).
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Cooling-Off Period (Distance Selling Rules)
- If the purchase was made online or via distance selling, UK law (Consumer Contracts Regulations 2013) grants a 14-day cooling-off period for most purchases. However, if this period has passed, Section 75 does not provide an additional right to cancel for a change of mind.
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Fault or Misrepresentation Required
- For a Section 75 claim to be valid, the product or service must be faulty, not as described, or subject to some form of misrepresentation. Changing your mind or deciding you no longer want the product, or a fault occurs after the warrant period has expired does not meet these criteria.
If your claim falls into the valid examples above, you may have grounds to file a Section 75 claim
If you believe the retailer’s terms are unfair or there is a legal obligation they are not adhering to (such as a breach of the Consumer Rights Act), you may need to explore other routes, such as reporting to Trading Standards
Section 75 and Your Rights with the Financial Ombudsman Service (FOS)
If your Section 75 claim is unsuccessful and you believe the finance company has acted unfairly in assessing this claim, you then have the right to escalate the matter to the Financial Ombudsman Service (FOS). The FOS provides an independent review of your complaint and has the authority to decide whether the finance company should uphold your claim or not.
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Right to Escalate a Complaint
- If the finance provider rejects your Section 75 claim, you can refer your complaint to the FOS. This is typically done after you have received the finance provider’s final response or if 8 weeks have passed without resolution. The finance company must explain why your claim was rejected and provide evidence supporting their decision. Review this carefully to understand if there is room for appeal.
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Independent Review
- The FOS will investigate whether the finance provider was correct in rejecting your claim. They assess the case based on fairness, reasonableness, and the law.
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Binding Decision
- If the FOS rules in your favour, the finance company is legally required to comply with the decision. This could include issuing a refund, compensating you, or taking other remedial action.