Legal rights of cardholders

According to Barclaycard, 95 per cent of s75 claims dealt with by credit card companies are the failure of a supplier. These are easy cases to deal with because, unlike goods being in some way unsatisfactory, which could be a matter of dispute, a supplier no longer in business is a matter of fact.

Indeed, when Land Travel, the company which offered inexpensive coach holidays to the continent, went bust, the credit card companies received about 20,000 separate claims and paid out pounds 3.6m. All claims were met. Customers who had paid for any part of their holiday from Land Travel with a credit card, were encouraged in media reports, both in the press and on TV and radio, to claim from their credit card company. This was initiated by CCRG.

What is perhaps surprising is that nowhere in the main text of credit card brochures - which a consumer is more likely to read - is there any reference to a consumer's rights under s75, although it is mentioned in a card's terms and conditions, where it is required to appear by law.

The industry argues that the matter is too difficult to explain. Yet Chrissie Maher, director of the Plain English Campaign, says it has devised such a wording: "Credit cards are so important to everybody," she says. "The wording we suggest makes it immediately clear in plain and better English - what the unhappy consumer must do. Everybody gains."

The NCC report calls for the lower limit of pounds 100 on s75 claims to be removed and argues that credit card companies deal with consumer complaints without the cardholder first seeking satisfaction from the supplier.

Surprisingly, the credit card companies have not stated the obvious. The NCC's proposal would increase the cost of providing plastic. Undoubtedly the increased costs would be passed on to consumers.

The credit card industry has never been happy with s75 of the Consumer Credit Act. For example, it maintains that it does not extend to purchases made abroad, whereas the OFT insists that it does. Nevertheless, as part of a voluntary code which expires at the end of the year, the credit card companies have agreed to honour s75 claims resulting from overseas transactions.

The OFT has made several proposals for reforms, including limiting the claim to the amount paid with the card, and giving the card companies the right to assume the rights of cardholders where insurance or bonding schemes exist.

It is unlikely that there will be any changes to the legislation in the foreseeable future. If you are not satisfied with goods and services paid for with your credit card and your attempts at obtaining redress from the supplier fail, you can make a claim against the credit card company. It pays to keep your credit card statements and sales receipts for major purchases for some time.

It is also worth checking to see whether you are covered under s75 if you use a debit card, where the payment you make comes straight out of your account. Lloyds Bank customers are, but others may need to check their small print.

Some cards, such as Barclaycard, give purchase protection, insurance against theft, loss or accidental damage within a certain number of days of purchase, providing it is not covered under any other insurance cover you may have.

Plastic can give far more protection than cash ever can - all you have to do is to remember your rights.