Court blow for credit card users

CONSUMER protection rights that cover credit card users do not apply to goods and services bought abroad, the High Court ruled today. The ruling, which was the result of a test case brought by the Office of Fair Trading, was described as a blow to consumers.

In a landmark case, the court said that cards used overseas do not enjoy the same consumer protection rights under Section 75 of the Consumer Credit Act.

Products or services bought on a card in the UK are covered by legal safeguards that mean customers can claim directly against their credit card company if problems occur.

The Office of Fair Trading took the matter to court because it believes the safeguards apply to card transactions anywhere in the world. Its view was challenged by Lloyds TSB, Tesco Personal Finance and American Express Europe.

Section 75 of the Consumer Credit Act states that if you pay by credit card you can claim your money back from the card company if the seller fails to honour the contract, or the item is faulty or if the seller wrongly describes it or if the supplier goes out of business with your money before the item is delivered.

The law applies only if the purchase is more than £100 and no more than £30,000. It does not apply to debit cards or charge cards.

The OFT is considering whether to appeal the decision. The National Consumer Council (NCC) described the verdict as a blow for consumers.

NCC head of policy, Jill Johnstone, said: 'This is a backwards step for consumer protection. People in the UK are heavy credit card users and, with more and more of us travelling abroad, Section 75 gave an extra safeguard and boosted confidence.'