The issue of whether consumer safeguards on credit card purchases are valid for overseas purchases could be decided by the end of the summer.

Proceedings in the High Court next week will decide whether issuing banks must cover bad debts on cards when consumers buy products or services from overseas.

At the moment most banks cover losses under Section 75 of the Consumer Credit Act 1974 if the items or services cost between £100 and £30,000. But many are unhappy about having to do this.

The Office of Fair Trading (OFT) believes the liability of issuing banks regarding such purchases should be the same as for domestic purchases.

"This doesn't matter where in the world it is, we think the consumer should be protected," an OFT spokesman told vnunet.com.

Last year three issuing banks - HSBC, Bank of Scotland and Sainsbury's Bank - assured the OFT that they would honour valid claims for purchases made abroad.

But others banks dispute the OFT's stance, which has led to the OFT's proceedings to clarify the issue once and for all.

Lloyds TSB, Tesco Personal Finance and American Express have argued that it is often impossible for them to pursue claims abroad, and that this interpretation of the law will leave them vulnerable to claims.

"We currently do pay out, but we are concerned about the possibility that we could face claims of millions of pounds," said a spokeswoman for Lloyds TSB.

"If someone went abroad for a face-lift and paid only £1 on their credit card and they wanted to make a claim, we could be liable [for the whole amount]."

A decision is likely to be announced later this summer.