One of the nice features of credit cards is that you are protected if you buy something for over £100 and something goes wrong with the purchase. Any liability on the supplier’s part is shared with the credit card, protecting you, the consumer.
The problem is that this rule has long applied to purchases made only in the UK. However, last year we spent over £9bn abroad on credit cards – including purchases made on foreign websites. These purchases were not included in the protection scheme – often known as the “section 75 ruleâ€.
The Office of Fair Trading believed that the rule should extend to purchases made abroad, but the providers didn’t agree. A recent court battle involved Lloyds TSB, Tesco Personal Finance and American Express that has been going on since 2003 finally resulted in the Law Lords ruling that the coverage should extend abroad. The appeal by the providers was finally thrown out last week.
It means that credit card issuers are liable, with the supplier, if the customer has a valid claim for misrepresentation or breach of contract for goods or service over £100, but less than £30,000. So if you buy something on the web from an overseas company and it doesn’t turn up, or it’s faulty, you can claim your money back from the card company.
That means that ebay purchasers using their credit cards (for items over £100) can rest assured that the card company will have to compensate them if the goods don’t turn up.
Payment organisation Apacs welcomed the ruling, but warned that credit cards, and not debit cards, afforded protection.
Card providers like to find a buck where they can – especially abroad, and they have upped their fees on foreign transactions. Foreign exchange fees are around 2.75% in most cases when a card is used abroad
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Tue, Nov 13, 2007
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