UK Credit Card Issuers Show Little Knowledge of Consumer Credit Act

UK Credit Card Issuers Show Little Knowledge of Consumer Credit Act

October 29, 2014         Written By Bill Hardekopf

A consumer group’s research has found that credit card issuers in the UK have little knowledge of a law that protects consumers from losing money on a transaction when an item is faulty or a retailer goes out of business.

The consumer group, Which?, found the majority of banks in the study had very little knowledge of Section 75 of the Consumer Credit Act. This law entitles cardholders to obtain a refund when something goes wrong with a credit card purchase.

The issuers did not properly explain the protections that consumers have when they pay by credit card.

Which? called 10 credit card companies in the survey and told a story about a relative who had purchased a couch from a sofa firm that had gone out of business. 10% of the payment was made with a credit card, and the rest was made with a check.

According to Section 75, the woman should have been eligible for a full refund of the purchase, even though she only put 10% of the charges on her card. This is true as long as the costs fall between £100 and £30,000. The couch in question was only £600.

Which? gave half points when advisers provided vague answers that indicated a refund may be possible. They also issued half points for advisers who said they would only be able to speak to the cardholder about the transaction. No points were given to advisers who said a refund would not be possible or the customer would not be able to file a claim.

After contacting 10 credit card providers, Which? found the majority were only able to answer half of their questions correctly. Santander was the least knowledgeable issuer, and Tesco Bank was the most knowledgeable, answering five of the six inquiries correctly.

This research shows the need for stronger education programs among banks in the UK concerning consumer rights.

“Section 75 is an important piece of consumer protection so it’s unacceptable that credit card providers have such poor understanding of it. Banks must improve staff training and help consumers get their money back when they are entitled to it.” said Richard Lloyd, executive director of  Which?, in a statement.

The information contained within this article was accurate as of October 29, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Bill Hardekopf

Bill Hardekopf is the CEO of and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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