Money mensch: Protecting your purchases in these tough times
There's an easy way to protect your purchases in these tough economic times. Surprisingly, it's using a credit-card. A little-known law, Section 75 of the Consumer Credit Act 1974, says that if you buy anything costing between £100 and £30,000 on a credit-card then the card issuer is jointly liable with the retailer or supplier if things go wrong. So, if the company goes bust and you haven't received your delivery, the credit-card company is legally obliged to give you your money back. Of course, that doesn't mean credit-cards should be treated lightly. They are dangerous, and the amount of interest they can charge you is huge. But provided you set up a direct debit to repay the bill in full every month, then all your big spending should be done on the card, rather than any other way to protect yourself. This protection applies to credit-cards only.
Unfortunately, what counts as "more than £100" can get a bit complicated. For instance, if you buy a kitchen for a total of £4,000 comprising separate units of varying prices, only the units that cost more than £100 would be protected.