Overseas purchases to be covered by credit card companies

Fri, 24 Mar 2006

A major victory was won by shoppers when judges ruled that credit card companies ought to protect customers who make purchases abroad using their credit cards.

Credit card firms are jointly liable for faulty goods or services in the UK as the supplier or if the seller ceases trading.

However three credit card companies were not willing to assume responsibility for purchases made overseas.

The Court of Appeal in a landmark ruling overturned a previous verdict by the High Court which was in favour of the credit card companies.

The effect of the new ruling is that Britons who make credit card purchases abroad and find the items are defective on their return home can demand a refund from their card provider.

This protection applies to purchases between the values of £100 - £30,000. Goods bought using the internet from overseas are also covered.

The action was instigated by the Office of Fair Trading (OFT) against Lloyds TSB, Tesco Personal Finance, and American Express after the card companies claimed they would "become the insurers of some 29 million foreign suppliers" – most of whom they have never heard of.

Mike Naylor of Which? said, "This is great news and means that UK cardholders are protected if something goes wrong with a purchase they make using a credit card anywhere in the world."

According to the Association for Payment Clearing Services, the British spent up to £123 billion in 2004 on their credit cards, out of this £12.5 billion was spent abroad.
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