Banks lose card cover appealSection 75 protection does apply abroad

31 October 2007

Credit card number and chip

Banks and credit card companies have failed in their bid to deprive British shoppers of valuable protection when they use their credit cards abroad.

In a landmark ruling, the House of Lords has confirmed that section 75 of the Consumer Credit Act does apply to foreign transactions.

Under section 75, you can claim against either the shop or the credit card company if something goes wrong with goods or services you've bought on a credit card.

This protection - which covers goods and services costing between £100 and £30,000 - is particularly important if the seller goes bust.

High Court

But a High Court ruling in 2004 said the act didn't apply when people made purchases abroad.

That ruling was overturned by the Court of Appeal and the matter has been finally resolved by today’s decision.

The House of Lords has confirmed that the protection also applies if you buy goods for delivery to the UK from overseas by telephone, mail order or over the internet.

Which? has always believed that section 75 applied whether a card is being used in the UK or overseas.

'Legal victory'

Which? spokesman Phil Jones said: ‘This legal victory is a great result for consumers and means they will continue to be protected when using their credit cards abroad. 

‘Most consumers already pay a charge to use their cards overseas, so it is very disappointing that credit card providers attempted to remove section 75 protection at a time when customers face rising credit card fees.’

If you've had a section 75 claim turned down by a bank or credit card company in the past because it related to an overseas purchase, it may not be too late for you to take action now.

Court action

Which? Legal Service’s Peter McCarthy said: ‘As long as the breach of contract or misrepresentation you were claiming for wasn't more than six years ago (five in Scotland) you'd still be in time to take your dispute to court.

‘Start by re-submitting your claim to the bank - if they won't settle you can go to the Financial Ombudsman. Remember, though, if you are going to court not to miss the cut off date for starting court action.’

Peter added: ‘Whenever you buy goods costing between £100 and £30,000 from a trader, try and pay at least a deposit using your credit card.

‘It doesn't matter how much you put on your card as long as it isn't more than £25,000. If the goods you order don't turn up or you discover you've been misled over what you were buying you can put your claim to the bank; much easier than trying to pursue a trader based thousands of miles away.’