Credit Cards Used Abroad Need Clarification

In a recent High Court in London it has been determined that holidaymakers who use their credit cards to purchase goods while abroad are not covered by payment protection policies offered by credit card companies.

Under section 75 of the 1974 Consumer Credit Act, a consumer has financial protection for domestic transactions of between £100 and £30,000, unfortunately this has now been revoked for purchases made overseas.

A spokesman for Abta said: "This is a complicated ruling that needs further clarification, but we do know that if you are abroad and use your card you won't be covered if something goes wrong.

"It could be very significant if this also applies to internet bookings, but this has yet to be tested." The action was brought jointly by the OFT and three high street banks to try to clarify whether consumers should be covered for purchases abroad. The OFT wanted the Consumer Credit Act to cover overseas transactions, while the three banks opposed it.