TSS advise on overseas credit card spending

As a result of a recent High Court ruling that overseas purchases are not covered by the Consumer Credit Act 1974, the Trading Standards Service (TSS) is advising consumers on the protection they can currently expect when using a credit card to purchase goods or services.

TSS said that consumers who use their credit card to purchase goods or services may be entitled to claim against the card issuer, as well as the supplier, if things go wrong. For example, if the goods are faulty and the supplier fails to give a refund or the supplier goes out of business having failed to deliver goods already paid for.

This extra level of protection is afforded by section 75 of the Consumer Credit Act 1974. The conditions are that in order to be able to claim off the lender for credit purchases, the cash price of the individual goods or services must be more then £100 and not more than £30,000.

However, there had been uncertainty for some time about whether this protection extended to purchases made overseas. In order to clarify the issue, the Office of Fair Trading (OFT) sought a court ruling, as lenders where interpreting section 75 diferently and some were refusing to pay out.

The High Court has now ruled that purchases made overseas are not generally covered by section 75. The ruling will also apply to purchases made from overseas suppliers, for example, via the internet. The OFT has said it is considering an appeal on the ruling.

Kevin McNamara of the TSS said: “This ruling removes a very useful form of protection, which has been used by consumers in the past to obtain redress in situations where it would otherwise not have been available.

“We have had cases where consumers who had used their credit card to pay a deposit on a timeshare or holiday club, which they had bought while on holiday in Spain, had been able to claim back off the credit card company when they found on their return to Northern Ireland that the deal had been misrepresented to them, or their contract had been breached.

“It means that holiday makers in these situations will just have to be that little bit more careful in the future when entering onto contracts abroad.”

Consumers who want further advice about this subject should contact Consumerline on 0845 600 6262.

(MB/SP)