Does Section 75 apply to business credit cards?

The short answer

Section 75 of the Consumer Credit Act 1974 makes a credit card lender jointly liable with a supplier when something goes wrong with a qualifying purchase. It is one of the strongest protections a personal credit card offers. It applies only to regulated consumer credit, and a credit card issued to a limited company, LLP or PLC is not regulated consumer credit. So on most business cards, including Capital on Tap, it does not apply.

Capital on Tap says so directly: “No, Section 75 of the Consumer Credit Act 1974 does not apply to Capital on Tap business credit cards, as they are not regulated under this act.” The same FAQ answer goes on to say that you may still be able to raise a chargeback under Visa’s scheme rules. That is the protection a company card actually gives you, and the rest of this page explains both.

What Section 75 does

Section 75(1) says that if the borrower under a debtor-creditor-supplier agreement has a claim against the supplier “in respect of a misrepresentation or breach of contract”, they have “a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable”. In plain terms: if the goods never arrive or are not as described, you can claim against the card lender as well as the seller, which matters most when the seller has gone bust or stopped answering.

Section 75(3) sets the limits. It does not apply:

• to a non-commercial agreement;
• to a single item with a cash price of £100 or less, or more than £30,000;
• to running-account credit that must be repaid in a single payment for each period of up to three months, which is how a charge card works (more on that below).

Section 75(4) adds that it still applies if the borrower went over their credit limit. None of that matters, though, unless the agreement is the kind the Act regulates in the first place.

Why company cards are outside it

Since 2014, consumer credit has been regulated under the Financial Services and Markets Act, and the Regulated Activities Order defines what counts. Article 60B defines a credit agreement as “an agreement between an individual or relevant recipient of credit” and a lender. Article 60L defines a relevant recipient of credit as “a partnership consisting of two or three persons not all of whom are bodies corporate”, or an unincorporated body that is not made up entirely of companies.

A limited company, an LLP and a PLC are all bodies corporate, not individuals and not small partnerships. A card agreement with one of them is therefore not a credit agreement in the regulated sense, so it is not a regulated credit agreement, and Section 75 does not reach it. That is the legal basis for Capital on Tap’s statement that its cards “are not regulated under this act”. It applies equally to most other company cards; our guide to business credit cards for limited companies covers the other differences that come with being the company rather than the individual.

You may notice that Capital on Tap holds a consumer credit permission from the FCA. Holding a permission is a statement about the firm, not about each product: the card agreement with your company is still unregulated for the reason above. The FCA register entries are set out on our is Capital on Tap legit page.

Sole traders and small partnerships

A sole trader borrows as an individual, and a partnership of two or three people (not all of them companies) is a relevant recipient of credit. Their business card agreements start inside the regulated definition. The question is whether an exemption takes them out.

The relevant one is article 60C(3): an agreement is exempt if the lender provides credit “exceeding £25,000” and the agreement is entered into “wholly or predominantly for the purposes of a business”. Business credit of £25,000 or less to an individual is not exempt on that ground. So a sole trader’s business card with a modest limit can be a regulated agreement, and then Section 75 can apply to qualifying purchases on it.

“Can” is doing real work in that sentence. Whether a particular sole trader card is regulated depends on its terms and limit, and issuers word their agreements differently. If Section 75 matters to you, read the agreement or ask the issuer directly before you rely on it. Capital on Tap does not lend to sole traders at all; the cards that do are in our sole trader cards guide.

Charge cards

Section 75(3)(c) excludes running-account credit where each period of up to three months must be repaid in a single payment. That describes a charge card, where the balance is due in full every month. So even a personal charge card does not carry Section 75 on that basis, and a business charge card, issued to a company, is outside it twice over. The other differences are in business credit card vs charge card.

Chargeback: the protection a business card does have

Chargeback is not a law. It is a process in the card schemes’ rules: your card provider asks the merchant’s bank to reverse a payment, for reasons such as goods not received, not as described, or a refund that never came. Capital on Tap cards run on Visa, and its FAQ describes disputes going through the Visa chargeback process.

Capital on Tap’s FAQ sets out the steps. Contact the merchant first, in writing if possible, follow its cancellation policy and return goods if that is part of the policy. If that fails, gather proof of purchase, your correspondence, and proof of cancellation or return, then phone Capital on Tap to raise the dispute. It says: “In most cases, we can only submit a chargeback within 120 days of the original transaction date.”

How chargeback compares with Section 75:

• It is not a legal right. Section 75 gives you a claim against the lender. Chargeback is the lender trying to recover the money on your behalf under scheme rules, and Capital on Tap says success is not guaranteed.
• It has a deadline. Capital on Tap generally needs to submit within 120 days of the transaction.
• It has no £100 floor or £30,000 ceiling. Chargeback can apply to a small software renewal or a large supplier payment.
• It only exists for card payments. Bank transfers, including Bill Pay, have no chargeback.

If you are unhappy with how your provider handled a dispute, you can complain to it and then, if you are eligible, to the Financial Ombudsman Service. Capital on Tap says complaints can go to the Financial Ombudsman Service, and the Ombudsman says “about 99% of small businesses and micro-enterprises in the UK can bring a complaint to us”. That is a complaint about the provider’s conduct, not a substitute for Section 75 liability.

Bill Pay and other bank transfers

Capital on Tap’s Bill Pay lets you pay invoices by bank transfer from your credit line. It is useful for suppliers who do not take cards, but the FAQ is explicit: “Because Bill Pay transactions are bank transfers, not card payments, they do not have chargeback rights.” It also says authorised payments cannot be cancelled, so check payee details carefully. For a supplier you trust and an invoice you have already checked, that may be fine. For a first order from someone new, a card payment keeps a dispute route open. The fees and trade-offs are on our Bill Pay page.

Protection at a glance

The debit card row is why the protection gap between a company credit card and a company debit card is smaller than people expect; the other differences, cash flow and rewards among them, are in business credit card vs debit card.

Protecting a business purchase without Section 75

1. Pay by card, not transfer, when the supplier is new or the risk is delivery. That keeps chargeback available.
2. Pay deposits rather than the full sum up front where you can, so less is at risk if something goes wrong.
3. Keep the paperwork. Order confirmations, invoices, delivery promises and emails are what a chargeback is decided on.
4. Raise problems early. Contact the supplier in writing as soon as something is wrong, and go to your card provider well inside the 120-day window.
5. Do not move company spending to a personal card for the protection. Section 75 would then be the director’s, not the company’s, and the bookkeeping and director’s loan consequences are usually worse than the protection is worth. Our business vs personal card guide explains why.

Section 75 is one of the few areas where a business card is genuinely weaker than a personal one, and we list it among the downsides in our Capital on Tap review. For most business spending, chargeback and sensible payment habits cover the realistic risks.

Credit is subject to status and eligibility. Capital on Tap advertises rates as low as 13.86% APR (variable) and does not publish a representative APR; your rate depends on your personal and business credit history and the Bank of England base rate. Lender: New Wave Capital Limited (trading as Capital on Tap).