Feeds

Overseas credit card purchases are protected

Appeal court ruling good news for consumers

Secure remote control for conventional and virtual desktops

The Office of Fair Trading (OFT) has won an appeal ruling which means consumer safeguards on credit card purchases made in the UK will generally extend to cover purchases made abroad, whether in person or online.

Three judges of the Appeals Court last month overturned a High Court ruling which refused protection for overseas transactions.

In the UK, consumers paying for goods with a credit card are protected by a provision in the Consumer Credit Act of 1974, section 75, that allows them to make a claim directly against their credit card company or the supplier if they discover problems with goods or services purchased with their card.

The credit card issuer and the supplier are jointly liable if the consumer has a valid claim for misrepresentation and/or breach of contract by the supplier – provided the cash price of an item is over £100 and less than £30,000, and the credit limit is no more than £25,000.

But there has always been a question mark over whether this protection applies to goods purchased overseas, and in July 2004 the OFT asked the High Court to issue a definitive declaration that it did.

Card issuers Lloyds TSB, Tesco Personal Finance (part of The Royal Bank of Scotland group) and American Express Services Europe Limited opposed the motion, arguing that there is no such protection.

In November 2004, the High Court found in favour of the card issuers, ruling that domestic transactions – whether from a shop, by mail order, by telephone or over the internet – are protected, but overseas transactions using a credit card are, in general, not protected at all.

The OFT appealed the ruling.

Giving the opinion of the Appeals Court late last month, Lord Justice Waller ruled that the protection did apply.

"In our view the primary purpose of the section is to provide additional protection for debtors under credit agreements of the kinds to which it relates," he said.

"There is nothing in section 75(1) or (2) that provides for a distinction to be drawn between transactions entered into in this country and transactions entered into abroad, to say nothing of transactions entered into on the internet, the place of which may be quite difficult to determine," he explained.

Consumer groups were pleased at the result. Mike Naylor, principal researcher at Which?, said: "It is great news for consumers that they are now officially covered wherever the card is used."

Lloyds TSB expressed disappointment at the ruling, but explained: "The purpose of the original case was not about reducing consumer protection, but to gain legal clarity over this complex principle. Before and since the original judgment, Lloyds TSB has met valid foreign Section 75 claims up to the amount charged to its credit cards and it will continue to do so."

The bank is considering whether to appeal to the House of Lords.

See: The ruling.

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Beginner's guide to SSL certificates

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Protecting against web application threats using SSL
SSL encryption can protect server‐to‐server communications, client devices, cloud resources, and other endpoints in order to help prevent the risk of data loss and losing customer trust.