A ruling by the Court of Appeal last week has confirmed that important protection is available to UK consumers when using credit cards overseas.

Last week Lord Justice Waller, Lady Justice Smith and Lord Justice Moore-Bick overturned a previous ruling by the High Court in November 2004 that section 75 of the Consumer Credit Act 1974 did not apply to overseas purchases, following an appeal by the Office of Fair Trading against the High Court's earlier decision.

The new ruling confirms the OFT's view that credit card issuers are individually as well as jointly liable with suppliers if the consumer has a valid claim for misrepresentation or breach of contract by the supplier where the price of the purchase is above £100 but no more than £30,000.  This means that cardholders can make a claim against a credit card issuer as well as or instead of the supplier.

UK consumers spent almost £123 billion on domestic credit card transactions in 2004, and a further £12.5 billion on overseas transactions.

Section 75 covers foreign transactions including where:

• A consumer uses a UK credit card to buy goods while abroad 
• A consumer orders goods from a foreign supplier while abroad for delivery into the UK
• A consumer in the UK buys goods which are delivered to a UK address from overseas by telephone, mail order or over the internet
• There is face-to-face pre-contract dealings with a foreign supplier temporarily in the UK, or with a UK agent of a foreign supplier, but the contract is not completed in the UK.

John Fingleton, OFT Chief Executive, said:

'The application of section 75 to overseas credit card purchases has long been uncertain, and we are pleased that the Court of Appeal has been able to examine Parliament's intention behind the legislation, and resolve the issue in favour of consumers and in a way which takes account of developments in the market.'

The OFT's tips for consumers on credit card purchases:

• Thanks to the consumer protection of section 75, money that seemed lost on a credit card purchase can be claimed back
• If you pay by credit card you can claim your money back from the card company if the seller fails to honour the contract, or the item is faulty or if the seller wrongly describes it or if the supplier goes out of business
• You do not have to attempt to claim your money back from the seller first - the credit card company is individually liable
• If you are buying an item costing over £100 and you are asked for a deposit, consider paying the deposit by credit card
• You are not covered by section 75 if you use a debit or charge card.