The Office of Fair Trading issued proceedings on Friday in the High Court to find out whether financ...
The Office of Fair Trading issued proceedings on Friday in the High Court to find out whether financial safeguards offered by credit card companies should also apply to consumer purchases made abroad as well as in the UK.
Action is being taken to try and rectify the rules concerning Section 75 of the 1974 Consumer Credit Act as Lloyds TSB and Tesco Personal Finance - part of the RBOS group - argue it is not their responsibility to process claims when there are problems with goods or services purchased overseas.
Rather than seek a full trial, the OFT is asking for a declaration or ruling on the point of law so a full hearing is expected later in the year.
The OFT argues that credit card issuers are jointly liable with suppliers - under 'equal liability' if the client has a valid claim for breach of contract or misrepresentation. This rule applies if an item is worth more than 100 pounds and less than 30,000 pounds, and providing the consumer's credit limit is no more than 25,000 pounds.
OFT officials point out these rules only apply when credit is advanced between the credit guarantor and the supplier, and not when an individual uses a bank overdraft to pay for the item.
It also does not cover debit or charge cards.
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