Relief For Credit Card Holders As The Lords Uphold Ruling
31 10 2007In a move which will be rued by the credit card industry, the Lords have upheld an earlier decision to instruct a number of credit card companies to refund the cost of items which were bought overseas, but either did not turn up or were damaged. In a move which was instigated by Lloyds TSB and Tesco Personal Finance they challenged the understanding of the Consumer Credit Act in relation to goods purchased outsdie of the UK
Under section 75 of the Consumer Credit Act, the credit card holder is insured for items with a value between £100 and £30,000 in the event of damage or non-delivery. The action was brought about because of the recent upsurge in internet usage, which has seen a massive rise in the number of products purchased online from overseas traders. The potential cost to the credit card industry could run into millions if not billions of pounds in the years to come.
The finance companies involved had tried to argue that overseas purchases were out of their jurisdiction and should therefore not be covered by UK regulations. However, the counter argument that it cost more to buy goods overseas was brought up time and time again, and the fact that consumers should at least be able to expect the same level of cover seen in the UK.
It will be interesting to see how the credit card companies react - Will they increase charges? Will they ban overseas transactions? Or will they just take the ruling on the chin? What ever you think, it seems inevitable that the consumer will be forced to dig deeper at some stage.
Categories : Compensation, Credits Cards, Regulations, UK
