Section 75 and chargebacks — recovering money when the builder's company has folded
The short answer: if you paid a credit card (even a deposit on a card and the rest cash/bank) for work that wasn't delivered, s.75 of the Consumer Credit Act 1974 can make the card lender jointly liable — even if the builder has gone bust. Bank transfers and debit cards have weaker but real routes (chargeback, APP fraud).
REVIEWED BY: Sean McNamara on 2026-09-03
Section 75 — the credit card route
Under section 75 of the Consumer Credit Act 1974, when you pay a trader between £100 and £30,000 (wholly or partly) by credit card, the card lender is jointly and severally liable with the trader for misrepresentation or breach of contract. In practice:
- Deposit on the card, balance by bank transfer? The lender's liability generally covers the whole contract price, not just the card-paid slice — this is the single most misunderstood s.75 point.
- The builder has dissolved or liquidated? Claim against the lender — they stand in the trader's shoes.
- How: write to the lender (disputes team), set out the breach, attach the schedule of loss and evidence. If they refuse, escalate free to the Financial Ombudsman Service.
- Time limit: the contract must be for cash price over £100 and up to £30,000, and claims are generally brought within 6 years — but start immediately; lenders resist stale claims.
Chargeback — debit cards and bank transfers
- Debit card: "chargeback" is a scheme rule (not statute) that can reverse a card payment for non-delivery/breach — usually within 120 days of the expected delivery/completion. Ask your bank's disputes team; success is less certain than s.75 but free to try.
- Bank transfer (Faster Payments/BACS): not reversible for a simple contract dispute. But if you were deceived into paying (fake identity, misrepresentation), ask the bank to treat it as an Authorised Push Payment (APP) scam claim — banks operate reimbursement rules for APP scams, and disputes escalate free to the Financial Ombudsman Service. Act within days, not weeks.
When the company is dissolved
- A dissolved company doesn't erase a legitimate claim: you can apply to restore the company to the register (Companies House) to pursue it — proportionate for larger losses.
- Check the company's status first: Companies House search.
- If it's in liquidation, register as a creditor with the liquidator — recovery rates are usually poor, which is exactly why the card route matters.
The hierarchy of recovery (fastest first)
1. Credit card (s.75) — strongest route where it applies; lender has deep pockets. 2. Debit chargeback — free, quick, time-boxed. 3. APP fraud claim — where deception is provable. 4. County court claim + enforcement — the general route (guide). 5. Insurance — check your home policy for legal expenses cover before paying anyone.
Practical notes
- Gather: card statement showing the payment, the contract/quote, cancellation/refusal correspondence.
- The Citizens Advice consumer service can advise on card disputes; the Financial Ombudsman resolves lender disputes free of charge.
- S.75 does not apply to pure "I changed my mind" — it needs misrepresentation or breach of contract.
This page is general information, not legal advice. Key statute: Consumer Credit Act 1974, s.75. Financial disputes with lenders escalate to the Financial Ombudsman Service. Verified 2026-09-03.
Preparing a claim? EvidenceCanvas (Casewright) helps you organise your evidence and draft pre-action documents for the small claims track. It is not a law firm and does not give legal advice.
Reviewed by Sean McNamara · 2026-09-03 · Independent information directory — not legal advice.