Credit card firms in legal battle over Section 75

Credit card issuers being a High Court battle today in a dispute over whether they are responsible for purchases made by customers outside of the UK.

Products or services bought on a card in the UK are covered by legal safeguards that mean customers can claim directly against their credit card company if problems occur.

Section 75 is the part of the Consumer Credit Act 1974 that makes your card issuer jointly liable with whoever you're paying if something goes wrong. It applies when you use your credit card to pay for something costing between £100 and £30,000. This can be useful if you have a problem with an item you bought and you can't get the retailer to resolve it, or you paid in advance for a product or service you didn't receive ? because the company's gone bust, for example. You can claim the full value of a purchase from your card company, not just the amount you paid on your card.

A grey area exists over whether the same law applies to purchases made abroad. The Office of Fair Trading (OFT) believes the safeguards in question apply to credit card transactions anywhere in the world.

This is being challenged by three banking organisations: Lloyds TSB, Tesco Personal Finance (part of the Royal Bank of Scotland), and American Express Services Europe. The OFT has asked the High Court in London to make a ruling on a point of law to clarify the situation.

The case is due to be heard before Mrs Justice Gloster at the High Court. It is expected to last until 29 July, with a judgment likely to be issued at a later date.