By Elliot Wright, 19th January 2010
People who buy goods with a debit card could soon enjoy the same
protection as those who use a credit card, as the Government looks
to shake-up the card industry.
This protection could include Section 75 of the Consumer Credit
Act that allows credit card users to seek compensation from their
credit card provider - in addition to just the retailer -
if an item purchased on their card for between £100 and £30,000
turns out to be faulty, unsatisfactory or fails to materialise be
it undelivered goods from an internet retailer or a cancelled
flight after an airline goes bust.
Currently the Section 75 rule only applies to goods purchased
with a credit card but the Government has hinted that it might
tighten the rules to include shoppers that use debit cards.
An extension of card rights would be a major victory for
embattled consumers still smarting from the banks' bank charges
victory in the Supreme Court last year.
10% of consumers who paid for something in
advance found themselves ripped off by £242 on average
According to Consumer Focus, 10% of consumers who paid for
something in advance found themselves ripped off by £242 on average
- with just under half of these managing to get their money
back.
Steve Brooker, markets expert, Consumer Focus, said: "Consumers
are losing out in the fight to reclaim money from bankrupt
businesses.
"Better protection of prepayments is in everyone's interest.
Consumers will be reassured that their money is safe, which will
encourage spending and help keep a valuable source of credit open
to struggling businesses."
The Government and its consumer watchdog, Consumer Focus, are
performing an industry-wide review and are expected to announce any
changes next month.
Speaking to the Daily Telegraph newspaper, Kevin Brennan, the
consumer affairs minister, said: "Cards are a very profitable
business and we don't have a problem with that, but we think they
should become clearer, more transparent and people should not feel
fiddled."
Useful links:
How to
make a Section 75 claim
Claims Financial
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