What does your provider know about your credit card rights?Companies give poor information in Which? test

27 November 2012

Credit card deals

Most of the UK’s credit card companies are failing to consistently give the right advice to customers trying to get a refund for a card purchase that has gone wrong.

Under Section 75 of the Consumer Credit Act, credit card companies are jointly responsible with the seller for purchases of more than £100 and not more than £30,000 using a credit card. The law covers orders that are never delivered, or turn up faulty, even if only the deposit was paid on the credit card.

Nine in ten give wrong credit card advice

When Which? Money made five calls to each of the UK’s 10 major credit card providers, the majority of call handlers gave our researchers the wrong information – often advising that the customer couldn’t claim the full amount from them. 

In 33 out of 50 calls to credit card companies, our researchers were wrongly advised that the card provider wasn’t responsible for the total outlay. And of the 10 providers we looked at, only one, Tesco Bank, gave consistently good advice.

What Which? found on Section 75 advice

Each caller explained that a £400 sofa had recently been ordered with an £80 deposit paid by credit card and the balance by cheque. But after cashing the cheque, the retailer had gone bust and the sofa was never delivered. 

Even though only the deposit was paid for on a credit card (and was under £100), the total transaction is still protected by Section 75. But this is not what most banks told our callers.

While Tesco Bank provided consistently good advice, at least one staff member from all of the other nine gave inconsistent, unhelpful or inaccurate advice. Capital One and MBNA gave our callers the correct advice in three of five calls, but the other seven providers offered poor advice more often than they gave good.

The most common wrong information given was that only the £80 deposit could be refunded. In 24 of the 50 cases, our callers were told that they would have to pursue the cheque payment separately with their bank.

Providers pledge to address credit card issues

John Lewis and Lloyds TSB were the worst offenders on this point. In all five calls, their call centre staff told our researchers they could only tackle the credit card payment, potentially leaving the customer out of pocket to the tune of £320. We asked both providers for an explanation, and were told they would seek to improve staff knowledge of consumer rights under Section 75.

Marks & Spencer also failed to give us correct advice in any of the five calls we made. In four of them, researchers were told that M&S could only deal with the £80 credit card deposit. In the fifth call, the staff member was unable to offer any helpful advice. M&S told us that it would be putting measures in place to rectify the problems we highlighted.

Some providers not only failed to give our callers the correct advice, they also sought to pass the buck on to authorities that shouldn’t have to deal with these issues. NatWest told one caller to contact trading standards, while Lloyds TSB advised another to take the matter to the police or the Citizens Advice Bureau.

Positive response from credit card providers

Which? has spoken with the credit card companies we investigated, and all have assured us that the issues raised will be addressed. We expect providers to meet all their responsibilities under this important piece of legislation, and will challenge them where we are aware of any potential issues.

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