March 22, 2006

On Wednesday three top judges will rule on a challenge by the UK’s Consumer Watchdog on a ruling that credit card guarantees supplied by credit card companies for goods purchased will only apply to domestic purchases and not purchases abroad.

Back in 2004 a High Court ruling was passed in favour of credit card companies in a test case. The result was a major boost to credit card companies and saved billions, however the ruling at the same time was a blow to millions of shoppers who use their credit card over the internet.

The Office of Fair Trading is arguing that the previous ruling was wrong and that the credit card guarantee should also cover purchase made abroad.

As the ruling stands just now, anyone purchasing goods while abroad or on the internet (supplier is overseas) will not be covered by their usual credit card guarantee scheme. Normally this scheme pays out for unsatisfactory purchases for any amount between £100 and £30000.