Section 75 of the Consumer Credit Act makes credit card companies jointly liable with retailers if goods or services are not delivered.

The clause gives consumers extra protection if they buy something costing between £100 and £30,000 on their credit card. In the past it has helped people claim money back when companies fail to deliver goods or go bust before a service has been delivered.

Plans to axe the Consumer Credit Act have been announced in a Treasury consultation. Under the proposals, the act will be replaced by rules overseen by the Financial Conduct Authority (FCA). Exactly what replacement protection will look like has not yet been decided – but could take years to implement.

Experts say that changes to the protection offered by credit cards could strengthen some rights, but endanger others.

On the plus side, there could be more clarity for transactions which aren’t directly between a credit card and a seller – when the debtor-creditor-supplier chain is broken. Currently, people may think they’re covered by Section 75 when they aren’t.

However, some industry experts who have already responded to a consultation about the Consumer Credit Act have argued that the credit card company should only be liable for the amount of credit it has provided rather than the overall liability of the provider.

Currently, you can pay the deposit for an item on your card, and as long as it’s for between £100 and less than £30,000, the whole cost of the purchase will be covered. A change might mean you need to put the whole lot on plastic to get the same protection.

‘Improve disclosure in the credit market’

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The rules currently also cover consequential losses. So, for example, if you bought a ticket for a concert that was cancelled, you may also be able to claim for your train ticket and hotel.

“Some argued this shouldn’t be included within the new rules. There were also questions over whether people should be able to claim from their credit card without pursuing the vendor first, which could make reclaiming cash more complicated and time-consuming.”

James Daley, managing director of Fairer Finance, said: “The review of the Consumer Credit Act provides a perfect opportunity to tear up the current regulations and start again to greatly improve disclosure in the credit market. We need new rules which ensure customers are given the right information at the right time, to help them properly understand the benefits and risks of credit products.

“The act contains a number of prescriptive rules around what firms must tell their customers – but these are often inhibitors to customer understanding, rather than enablers. The rules around disclosure should be entirely governed by the FCA – but as the FCA takes on that responsibility, it should take a fresh approach in developing a new, effective and proportionate disclosure regime – which empowers consumers to make the best decisions.”