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Court rules credit card protection applies abroad

UK credit card protection to apply abroad

Shoppers who use their credit cards abroad are entitled to the same level of protection as when they use them in the UK, the Court of Appeal has ruled.

Under the Consumer Credit Act, shoppers can claim against either the shop or the credit card company if something goes wrong with goods or services they’ve bought on a credit card. This protection – which covers goods and services costing between GBP 100 and GBP 30,000 – is particularly important if the seller goes bust.

A High Court ruling in 2004 declared that section 75 of the act, which covers this protection, didn’t apply when people made purchases abroad. That’s now been overturned after the applied to the Court of Appeal.

Great news for cardholders

Which? Principal Researcher Mike Naylor 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.

‘This ruling confirms our view that section 75 of the Consumer Credit Act makes the credit card company jointly liable with the retailer for a breach of contract or misrepresentation, whether the card is used in the UK or overseas.’

The protection also covers you if you buy goods from a foreign website using your credit card, as long as the value is more than GBP 100.

Lloyds TSB, Tesco Personal Finance and American Express Services Europe had argued that, if section 75 applied abroad, they would ‘become the insurers of some 29 million foreign suppliers’, most of whom they would never have heard of.

They said they would be inundated with claims and argued they would also be liable for credit card purchases over the internet from fraudulent foreign suppliers who failed to deliver.

But Lord Justice Waller said today that there was nothing in section 75 that provided for a distinction to be drawn between transactions entered into in this country and transactions entered into abroad.

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