Credit card claims on the rise

Posted: 11/09/2012

We have seen an increase in the number of claims that we are currently pursuing against a claimant's credit card supplier for compensation for damages resulting from accidents abroad.

A claimant has the option of pursuing a claim directly against his credit card supplier if, for example, an accident occurs during a holiday or an excursion, provided it was paid for by their credit card and the accident is caused by some fault on the part of the supplier.

This is sometimes a favoured option since the credit card supplier finds it difficult to obtain evidence from the tour operator or excursion provider to rebut any allegations of negligence.

The House of Lords decision in Office of Fair Trading v Lloyds TSB Bank plc [2008] confirmed that a claimant can rely upon section 75 of The Consumer Credit Act to pursue a claim on this basis. It also clarified that it extended to transactions entered into overseas, provided the contract was governed by a UK credit agreement.

It is important to realise that there is one particularly significant exception: section 75 only applies to commercial transactions in excess of £100 and does not in itself provide grounds for a claim against a supplier. The claimant must have a valid claim for a breach of contract under The Sale of Goods Act, or other relevant legislation, and they then have a like claim against the card provider for the full amount of the claim.

There is currently some uncertainty as to whether more than one claimant can rely upon section 75, should they suffer injury as a consequence of, for example, an excursion paid with a credit card. This particular issue will require further guidance from the courts.

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