From: "Neaco" 
Newsgroups: uk.finance
Subject: Setback for UK credit card users 
Date: Fri, 12 Nov 2004 23:45:14 GMT

http://news.bbc.co.uk/1/hi/business/4007511.stm

UK consumers using credit cards abroad should not be covered by UK payment 
protection rules, a court has ruled.
The High Court has said Section 75 of the Consumer Credit Act 1974 does not 
apply to overseas purchases.

Under the rule, shoppers have the right to claim against the card issuer if 
a purchase is unsatisfactory, faulty, or the seller refuses to compensate 
them.

The Office of Fair Trading (OFT) asked the court for an official ruling, as 
some lenders were refusing to pay out.

The OFT has argued the rules should cover transactions made abroad or on 
goods purchased from overseas suppliers through the internet, over the 
telephone or via mail order - and not only on goods bought in the UK or from 
UK-based shops.

Its view was opposed in court by Lloyds TSB, Tesco Personal Finance and 
American Express.

Grey area

Section 75 has become a useful safety net for British consumers, as foreign 
travel and online shopping have increased in popularity.

But there was increasing uncertainty if the rule, which is based in UK law, 
applied on purchases made outside the UK's borders.

This confusion meant that some lenders were not compensating consumers while 
others were.

Some lenders said it had become too expensive to underwrite purchases in 
this way.

The OFT said it was considering whether to appeal the ruling, which will 
apply not only to purchases made abroad but also from overseas suppliers, 
via the internet, for example.

Citizens Advice Director of Policy Teresa Perchard said she found the 
court's decision "disappointing".

"It means that travellers and holiday-makers buying goods and services in 
another country will not automatically have the same protection as those 
making purchases at home," she said.

"We believe credit card companies should protect their customers wherever 
they buy."

She advises consumers to check their terms and conditions before they 
purchase a credit card and to switch to those companies who have said they 
will provide this protection.

WHAT IS SECTION 75?

Section 75 provides that for credit purchases with a cash price above £100 
and not more than £30,000 the consumer is entitled to claim form the lender 
if things go wrong. For example, if the supplier breaches the contract