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Is debit card protection the same as for credit cards?

Though purchases made on your credit card offer you some protection, can the same be said for your debit card? We take a look.

You are protected by Section 75 of the Consumer Credit Act whenever you make a purchase for goods or services worth between Ј100 and Ј30,000 using your credit card.

Section 75 states that you and your credit card provider are 'jointly and severally liable' for your purchase, meaning if something should go wrong, your credit card provider must refund you if the retailer won't.

In terms of 'things going wrong' this includes cases when the goods you have paid for fail to materialise, are poor quality, or are in some other way inadequate. In all such cases your credit card provider is legally required to refund your money.

As such the way in which your credit card purchases are protected is very black and white, but when it comes to debit cards, it's more of a grey area.

How are debit card purchases protected?

While credit card purchases are protected under Section 75 of the Consumer Credit Act, debit card purchases don't qualify for this protection simply because they don't form part of a credit agreement.

However, most debit card providers are starting to offer a form of protection when you make purchases using your card.

You have some protection for purchases made using Visa, Visa Electron, MasterCard and Maestro debit cards, through something called Chargeback. (There is a similar purchase protection scheme in place for Amex charge cards.)

The scheme makes it possible for you to claim a refund if a purchase made using your debit card is unsatisfactory, if you are billed multiple times, if you don't receive goods you've paid for, or if your card is used fraudulently.

You can claim a refund for any amount of money so it can also be invoked if you have problems with a credit card purchase over Ј30,000 or under Ј100 in value.

Remember that any protection offered isn't a legal obligation (like Section 75 for credit cards) but an in-house rule: this means that

the exact rules for chargeback schemes vary by card provider, so you should make sure you are aware of your debit card's chargeback rules.

If you want to make a claim, you'll have to contact the bank who provided you with the card within 120 days of when your goods should have been delivered. If the goods are faulty or your card was used fraudulently, contact your bank within 120 days of when you are first made aware of this.

Ask them to initiate the Chargeback process and a dispute will be opened by your bank, who will investigate the matter and refund your money when this is settled.

If your Chargeback claim fails, you can take it to the Financial Ombudsman Service within six months of being notified.

PayPal's purchase protection scheme

Unfortunately, you are unlikely to be protected under debit card Chargeback schemes for items purchased using PayPal. In these cases the act of loading money onto your PayPal account counts as the debit card transaction, so unless the money fails to be credited it won't be covered.

PayPal runs its own purchase protection scheme which extends some cover to your purchases, but again it is in-house rather than regulated by law. You can read about the scheme on the PayPal website .

It's worth noting however that while credit card providers are under a legal obligation to refund you because of the Consumer Credit Act, debit card providers are not legally required to honour your refund request. Therefore a little more persistence may be needed when claiming a refund for your debit card transaction.

In all cases of purchases made using a credit or debit card which are unsatisfactory, it is always a good idea to take up the matter with the retailer or service provider first before claiming for a refund from your card provider - they may be able to settle the dispute themselves, saving you potential hassle.

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