Credit card protection case lost by banks : Credit Card Guide

Credit card protection case lost by banks

Credit card companies have lost their case over the protection offered to consumers that use their cards to purchase goods and services abroad, which are then either not delivered or are damaged.

Consumers are able to enjoy this protection with purchases that they make with their cards in the UK but rows have been erupting over whether consumers should receive the same level of protection with goods and services that are purchased from abroad – this has been a grey area for some time according to reports.

An Appeals Court had already ruled earlier in the year that credit card companies, along with suppliers, would be liable if purchases were not delivered or were damaged with protection on goods and services between the values of £100 and £30,000. However, banks argued that they knew little or nothing of the services and products that were purchased abroad, and therefore should not be held responsible for insuring the purchase of such goods or services.

However, the House of Lords has decided that there is nothing in the Consumer Credit Act to state that there are any territorial limits on protection, and there is nothing to state that goods and services purchased from abroad are not covered. An official from APACS stated that although this was bad news for banks and card companies it at least gave clarification to the issued.

She stated: "At long last we have clarity. The banks now know where they stand and there is no doubt it is good for consumers."

An Office of Fair Trading spokesperson stated: "It confirms that credit card issuers are individually and jointly liable with suppliers if a consumer has a valid claim against the supplier for misrepresentation or breach of contract."

Tom Smith
9th November 2007

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