The Office of Fair Trading (OFT) has issued proceedings in the High Court seeking clarification as to whether consumer safeguards on credit card purchases apply to purchases made abroad as well as in the UK.
The aim of this test case brought by the OFT, with Lloyds TSB and Tesco Personal Finance as the defendants, is to gain clarification about the liabilities of issuing banks regarding overseas purchases under Section 75 of the Consumer Credit Act 1974.
Section 75 states that card issuers are jointly liable with suppliers if the consumer has a valid claim for misrepresentation and/or breach of contract by the supplier.
The OFT believes that this covers purchases made from abroad, but there is a lack of transparency in the wording of the current law.
This means that a number of card issuers, including Lloyds TSB, which are concerned at the growing level of disputed purchases from abroad, believe that their liability covers only domestic purchases.
A full hearing, when the judge will make a declaration clearing the issue, is expected later in the year.
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