Debit Card Refunds: Your rights

[nattie]

Debit card refunds: your rights (updated)


After the collapse of Zoom airlines and wedding gift firm Wrapit, we've looked at how to claim money back from your credit card.

But many of you have asked whether you can also claim money back via your debit card if goods or services are not delivered or products are faulty.

Firstly, remind me, what protection is available if I use my credit card?

When you spend between £100 and £30,000 on your credit card you are covered under Section 75 of the Consumer Credit Act. That applies if the goods you buy are faulty or if products or services are not delivered.

You can claim the money back from your credit card company. This applies even if you pay just a deposit on your credit card, as long as total price of your purchase is between £100 and £30,000.

So do I get the same protection if I use my debit card?

There are 71.6 million debit cards in the UK: two thirds of them are Visa and a third are Maestro.

Maestro debit card

Under Maestro UK rules, UK cardholders don't have the right to a refund if a company fails to deliver the goods or services they have paid for.

In a statement, Maestro told us:

"The cardholder's bank is not obliged under both the Maestro domestic rules and UK law to refund the cost of those goods/services [which aren't delivered]."

If the company goes bust, it said:

"The situation is the same as for consumers who have made payment by cash or cheque, where they can stand in line as a creditor of that failed business."

However, there is an exception.

If you are a UK cardholder who ordered goods online from an overseas website, Maestro says you have the right to a refund if they don't arrive.

So what is an overseas website?

Maestro says it is any website whose "centre of operations" is outside the UK. Which may be the case even if a website name ends with dot uk, it says.

Update 3 September:

In earlier versions of this online story and during the Working Lunch programme on 2 and 3 September, we said that Maestro would refund purchases made online that then aren't delivered.

We said: "So if you've ordered some books, for example, and they don't arrive you can ask for the money to be credited back to your account."

However, Mastercard, which runs Maestro, has now issued a new statement (above) which changes their earlier position.

Update 4 September:

Maestro have given us further information about the rights of UK cardholders using overseas sites (added above).

Visa debit card

A Visa debit card offers significantly better protection for shoppers. Their scheme is called Visa Debit Chargeback and any bank that issues a Visa debit card has to comply with the scheme.

You can claim money back if the goods you buy are damaged, or the product or services are not delivered.

There is no limit on what you can claim. But you have to claim within 120 days of the date you expected the goods to be delivered or the firm going bust.

So this isn't as good as when I use my credit card?

You get better protection if you use your credit card.

The key difference is that when you claim on a credit card under Section 75 of the Consumer Credit Act, the credit card company is legally liable.

But the Visa Debit chargeback scheme is not legally binding, so you don't have any legal redress if you are unhappy.

I have a Visa debit card, but my bank says it hasn't heard of the Chargeback scheme. What should I do?

Unfortunately, a number of Working Lunch viewers have found this.

But a spokesperson for Visa Europe stressed that all legitimate claims that abide by the terms and conditions should be dealt with.

He told us that all banks who are members of the scheme should comply with the rules. The members include Nationwide, Barclays, Halifax, and Lloyds TSB.

So you will just have to insist, or ask to speak to someone more senior.

What if I bought goods outside of the UK, am I still protected?

Yes, in general for Visa debit. There are some small differences in the way the way the rules are applied in some countries, but in general, you should be protected.


I am paying for a guitar in instalments. I have already paid some in cash and some on my Visa debit card, but the retailer has now gone into administration. Can I claim all the instalments back?

Quite simply, yes you can, as the company has gone bust. Remember you have to get your claim in within 120 days of their collapse and back it up with proof of all your transactions.


Source:BBC..will update with link when I am able to.

[Tony]

Hi Nattie,

This is brilliant thanks. What about charge cards i.e. American Express and Diners Club?

I haven't been able to find any specific info about "Visa Debit Chargebacks", but I am guessing that the protection is less than that offered by Section 75 of the Consumer Credit Act. The 120 time limit is for a start.

Tony

So with the fall of XL i can go to Halifax with my Visa debit card and request my money back? That sounds a lot simpler (in theory) than going through the ATOL scheme

[katealpha]

Thanks for the useful info on debit card protection.

[Adele]

Hi i am just wondering i purchased a dvd online only they havent deliverd it nor can i get in touch with the company i have tried emails and the phone number thats been given isnt been reconised, because i purchased it through a barclays visa debit card can i claim the money back???

[Tony]

Hi Adele,

Give them a ring and ask for the disputes department and explain the situation. Ask to make a claim under the chargeback scheme if they do not immediately offer this.

Best regards,

Tony

[hardikmaru]

Originally Posted by Tony

Hi Nattie,

This is brilliant thanks. What about charge cards i.e. American Express and Diners Club?

I haven't been able to find any specific info about "Visa Debit Chargebacks", but I am guessing that the protection is less than that offered by Section 75 of the Consumer Credit Act. The 120 time limit is for a start.

Tony

Hi

Was wondering if you can help me with some urgent advice around the problem I am facing. If you are not the right contact would highly appreciate if you can forward me to the relevant group.

I applied with a FX broker a year back and started trading with them. So I used to fund my account by providing margin using my Nationwide Visa Debit card and then buy/sell FX based on the sums deposited with them. The FX broker is called IFOREX.com and they were based somewhere in Israel at that time and now they claim to be in Greece somewhere. Since I use to deposit my margin money with them using my Nationwide Visa Debit card, they had stored all my information. Since September of this year and until October they ended up taking chunks of money using my Visa Debit card to a total Sum of £ 20,000 . Since this card was linked to my current account with Nationwide where I had these funds, they managed to take money out. Only in October when I found out that they had taken money out without even me supplying the CVV code they said they had applied those towards some transactions which I fail to recognise.

My question is how can a merchant take money out from my card when I haven't supplied the CVV number to them . I did supply to them initially when setting up the card details with them, but does this mean that now they can use this card to debit money whenever they need. This is not right. Considering that these brokers are dodgy and they are not regulated and not in this country was wondering what are the options available to me now, to get this money back which they have taken incorrectly. Unfortunately, in this case I haven't bought any product from them which I can show that they haven't been delivered since they are just fx brokers..

Appreciate your advise

Thanks hardik