Does A Credit Card Render Wedding Insurance Surplus To Requirements?

In earlier articles about wedding insurance, we have made mention about the cover afforded by Section 75 of the Consumer Credit Act 1974 and how it can often cover things that you are seeking to cover under a wedding insurance policy. For that reason, we are devoting a whole article on what is covered by this clause, what is not covered and how it applies.

The first thing to understand about this clause is that it only applies to credit cards and store cards. It does NOT apply to debit cards, cash transactions or charge cards. It is important that you understand this, as there have been many cases of people using their debit cards and then finding that Section 75 does not apply!

Having got that out of the way, let us consider what is covered in the context of wedding insurance and where there are overlaps. Basically it puts the creditor, i.e. the credit card company, in the same position as the supplier. They are considered jointly responsible. Therefore, if you paid for your venue using your credit card, and the company went bust, you can claim the refund from your credit card company as if they were the venue company. It is worth understanding that this law was made back in 1974 to protect people taking goods and services under a credit agreement, who then found that the said service or goods were not supplied or were faulty. It prevented them having to repay for something they never had.

Deposits

One area of confusion occurs where a person pays only the deposit for an item or service. For section 75 to apply, your payment needs to be over £100. Therefore, if you pay a deposit of £100 or more, if that items or service fails, you can still claim the whole loss. For example, if you bought a car for £10,000 and paid the deposit originally on your credit card, if the company went bust and you did not get your car, you can still claim the whole £10,000 under the section 75 law. One thing that you need to understand also is that the law clearly states that there must be a direct relationship between you and the person/company you are purchasing from. For example, a lot of people these days use an intermediary payment service like Paypal or Moneybookers. This instantly removes the direct legal contact between you and the supplier, so the law will not apply in these cases.

Chargebacks

One final area in our brief overview of this subject is what happens if your payment is under £100? Well there can still be a remedy here also, using your credit card. There is a system called a 'chargeback', where the credit card company will suspend the payment to the supplier, or even retrieve the payment until the dispute is resolved. It is not as reliable as the Section 75 law, but the credit card companies are pretty good at resolving these types of disputes in favour of their customers.

So Why Do I Need Wedding Insurance?

If payments could be covered by either the Consumer Credit Act or a chargeback, why on earth would you bother with wedding insurance then? The answer is simple, wedding insurance covers you for so much more! As well as the obvious like public liability claims, marquee cover or claims relating to death or injury, wedding insurance would also cover you for related costs. If, as in the example we used earlier your venue went bust and you had to re-arrange the day, you might be able to claim for this under Section 75 if you paid using your credit card. However, the credit card company would only be equally liable for THAT transaction and wouldn't cover you for the related costs of perhaps having to re-arrange your photographer, your florist, the caterers etc.

Wedding insurance certainly makes sense then and with premiums starting from around just £20, it seems daft not to take out a policy. Take a look at our comparison table to compare policies from a number of providers.

References:

MoneySavingExpert.com