High Court victory for consumers

Posted in 'Personal Finance' by Richard Catlin

09 November 2007

A ruling in the House of Lords has dismissed an appeal made by lenders that they should no longer provide consumer protection for problems that arise from the purchase of goods made overseas on credit cards.

As reported by us last month, some of the UK’s largest credit card providers have been claiming that Section 75 of the Consumer Credit Act, 1974 should not apply to purchases made abroad.

This section of the Act gives UK consumers extra protection when making purchases using their credit card. Essentially, it means that the card issuer is equally responsible with the seller of goods or services that cost between £100 and £30,000. If the goods are undelivered or damaged and if the consumer cannot get recourse from the seller, the consumer can simply ask the card company to refund the amount paid.

Lenders argued that because the Act was established when there were significantly less volumes of foreign transactions, it wasn’t fair that they should be held responsible for the quality of overseas goods or services. We’ve always disagreed with this view – as in 1974 one of the principal marketing messages used on credit card advertising was the ability to use cards in outlets all over the World.

Thankfully, the ruling means that we’ll continue to be covered.

If you are jetting off for a winter break, we’d recommend taking a Post Office Card. It’s one of the only cards around to not charge you for using your card abroad, and is also great for Christmas shopping, offering 0% on purchases for 3 months. The Typical APR on the Post Office card is a competitive 16.9%.